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Natural gas prices fall with industry still weak
Source: Agencies |
June 19, 2009, Friday
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Online Edition
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A THREE-week rally in natural gas prices paused yesterday after the U.S. government reported a huge build up in supplies, more evidence of a severely weak industrial sector.
Natural gas, a key energy source for power plants, had been trading higher most of June, though it still fetches less than a third of last year's price.
Natural gas for July delivery lost 16 cents to settle at US$4.093 per 1,000 cubic feet in trading on the New York Mercantile Exchange.
Benchmark crude for July delivery rose 34 cents to settle at US$71.37 a barrel on the NY Merc. In London, Brent prices added 21 cents to settle at US$71.06 a barrel on the ICE Futures exchange.
Oil has doubled since March on investor optimism that the global economy is on the road to recovery from its worst slowdown in decades. Indicators this week suggest growth remains sluggish, but some analysts are anticipating a better economic environment later this year.
"We continue to expect an improvement in fundamentals to begin to take hold in the next several months," Goldman Sachs said in a report. "Recent data points have already begun to suggest some stabilization."
Goldman said it expects the prices of oil to rise to US$85 a barrel in six months and reach US$95 by the end of 2010.
On yesterday, natural gas prices fell after the Energy Department's Energy Information Administration said in its weekly report that supplies in storage rose by 114 billion cubic feet.
Demand plunged for natural gas as American manufacturers shuttered factories and shed hundreds of thousands of jobs. Earlier this week, the Federal Reserve said production at U.S. factories, mines and utilities dropped 1.1 percent last month, the biggest decline since March.
Meanwhile, U.S. retail gas prices climbed higher for the 51st straight day, and oil prices wavered with some signs of improvement in the economy as a whole.
Pump prices added 0.6 cents overnight to a new national average of US$2.685 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of gas is 37.1 cents higher than last month, though it is US$1.39 cheaper than the same period last year.
In other Nymex trading, gasoline for July delivery fell less than a penny to settle at US$2.0295 a gallon and heating oil dropped 2.6 cents to US$1.837.
Natural gas, a key energy source for power plants, had been trading higher most of June, though it still fetches less than a third of last year's price.
Natural gas for July delivery lost 16 cents to settle at US$4.093 per 1,000 cubic feet in trading on the New York Mercantile Exchange.
Benchmark crude for July delivery rose 34 cents to settle at US$71.37 a barrel on the NY Merc. In London, Brent prices added 21 cents to settle at US$71.06 a barrel on the ICE Futures exchange.
Oil has doubled since March on investor optimism that the global economy is on the road to recovery from its worst slowdown in decades. Indicators this week suggest growth remains sluggish, but some analysts are anticipating a better economic environment later this year.
"We continue to expect an improvement in fundamentals to begin to take hold in the next several months," Goldman Sachs said in a report. "Recent data points have already begun to suggest some stabilization."
Goldman said it expects the prices of oil to rise to US$85 a barrel in six months and reach US$95 by the end of 2010.
On yesterday, natural gas prices fell after the Energy Department's Energy Information Administration said in its weekly report that supplies in storage rose by 114 billion cubic feet.
Demand plunged for natural gas as American manufacturers shuttered factories and shed hundreds of thousands of jobs. Earlier this week, the Federal Reserve said production at U.S. factories, mines and utilities dropped 1.1 percent last month, the biggest decline since March.
Meanwhile, U.S. retail gas prices climbed higher for the 51st straight day, and oil prices wavered with some signs of improvement in the economy as a whole.
Pump prices added 0.6 cents overnight to a new national average of US$2.685 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of gas is 37.1 cents higher than last month, though it is US$1.39 cheaper than the same period last year.
In other Nymex trading, gasoline for July delivery fell less than a penny to settle at US$2.0295 a gallon and heating oil dropped 2.6 cents to US$1.837.
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