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Friday, February 14, 2025

US natural gas prices fall again on supply concerns

by

20120327

NEW YORK-Nat­ur­al gas prices fell again yes­ter­day amid doubts that con­sumers, busi­ness­es or in­dus­try can put a sig­nif­i­cant dent in the huge sur­plus of the fu­el in the US. Nat­ur­al gas fu­tures fell 2.3 cents to US$2.20 per 1,000 cu­bic feet (28.3 cu­bic me­ters) af­ter drop­ping 5 cents on Mon­day. That's a 10-year low and half of what nat­ur­al gas was fetch­ing back in Ju­ly. Over­sup­ply and mild win­ter weath­er have con­tributed to the plunge.

Any mon­ey that con­sumers are sav­ing on nat­ur­al gas may be go­ing in­to the gaso­line tank. The na­tion­al av­er­age for reg­u­lar gaso­line in the U.S. is US$3.90 per gal­lon. It's risen 17 cents in March and 62 cents since Jan­u­ary 1. A pri­vate re­search group said Tues­day that a wide­ly watched barom­e­ter of con­sumer con­fi­dence bare­ly budged in March as high pump prices helped off­set good news in the stock mar­ket. Since Jan. 31, the na­tion­al av­er­age for gas has ei­ther risen or been un­changed on 53 of 56 days.

Mean­while oil prices were down slight­ly. Bench­mark US crude oil fell 14 cents to US$106.90 per bar­rel. In Lon­don, Brent crude for May de­liv­ery fell 45 cents to US$125.20 per bar­rel on the ICE Fu­tures ex­change. Oil prices re­main high be­cause of on­go­ing ten­sion over Iran's nu­clear pro­gram. Oil has jumped from US$75 a bar­rel in Oc­to­ber be­cause of con­cern that a mil­i­tary strike by Is­rael or the US.against Iran's nu­clear fa­cil­i­ties would dis­rupt glob­al crude sup­plies.

Nat­ur­al gas sup­plies are more than 50 per cent above the five-year av­er­age for this time of year. That's due to a boom in pro­duc­tion in Penn­syl­va­nia, Ohio, Texas and oth­ers states. Warmer than usu­al tem­per­a­tures this win­ter al­so meant home­own­ers used less nat­ur­al gas for heat­ing than in years past.

Shiyang Wang, an an­a­lyst at Bar­clays Bank PLC, said in a re­search re­port that the mar­ket has turned its at­ten­tion to whether the sur­plus gas in stor­age could be ab­sorbed by hot sum­mer weath­er and util­i­ties opt­ing to use cheap gas for pow­er gen­er­a­tion in­stead of coal. If stor­age is still abun­dant as sum­mer ends, prices could re­main low in Oc­to­ber and No­vem­ber, the an­a­lyst said.

In oth­er en­er­gy trad­ing, heat­ing oil fell two cents to US$3.21 per gal­lon and gaso­line fu­tures dropped 3 cents to US$3.39 per gal­lon.

AP


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