Related News
Weak demand puts natural gas prices at 52-week low
Source: Agencies |
December 4, 2009, Friday
|
Online Edition
Online Edition
NATURAL gas prices have slumped well below what they were last year, and that trend will likely continue into 2010.
The New York Mercantile Exchange contract for January delivery at one point dropped to a new 52-week low of US$4.432 per 1,000 cubic feet yesterday.
The government then reported that the amount of natural gas in storage rose again, surprising most energy experts. The country has never had this much natural gas in storage.
At this time of year, natural gas supplies are getting smaller as people turn on the heat in their homes.
That's not happening this year because the winter has been so mild. Instead, more gas was placed into storage last week, the first time that has happened this late in the year since at least 2001.
The salt caverns and other places where the U.S. stores natural gas are near or at capacity because major industrial power users have been shuttering plants or slowing production. The Energy Information Administration said yesterday that natural gas stocks have set new national records for seven consecutive weeks.
For consumers, that likely means an extended period of cheap energy, though how long that will go on is not clear. But heating bills will be cheaper in most places and power companies that use natural gas also will feel less pressure to raise electricity rates.
Oil prices also fell yesterday despite promising jobs numbers.
Benchmark crude for January delivery gave up 14 cents to settle at US$76.46 a barrel on Nymex. In London, Brent crude for January delivery rose 48 cents to settle at US$78.36 a barrel on the ICE Futures exchange.
The Labor Department said yesterday that the number of newly laid-off workers dropped unexpectedly to the lowest level since the week of Sept. 6, 2008.
Still, the U.S. continues to sip at its petroleum reserves as millions of laid off workers have stayed out of the morning commute. Oil companies are finding it easier to store crude and deliver it later when demand has hopefully picked up.
Refiners that turn crude into gasoline and other fuels have slowed production and even shut down facilities permanently.
"Demand is pretty bad," said Peter Beutel, an analyst with Cameron Hanover. "Refiners just don't have the incentive to run right now. So people will store crude, thinking that something will happen down the road."
That weak demand is also affecting imports.
Oil imports have sunk to the lowest point since the fourth quarter of 1990, when the U.S. was preparing for the first Gulf War, according to analyst Stephen Schork.
At the pump, retail gas prices ticked higher by less than a penny overnight to a new national average of US$2.633 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 5.3 cents cheaper than it was a month ago, but it's still 83 cents more expensive than the same time last year.
Refiners shut down much of their operations last year as energy prices tanked, and they're doing so again. Crude prices are still high enough that refiners are struggling to make a profit converting it into fuel.
In other Nymex trading in January contracts, heating oil increased 1.31 cents to settle at US$2.0495 a gallon and gasoline added less than a penny to settle at US$1.993 a gallon. Natural gas gave up 7.1 cents to settle at US$4.459 per 1,000 cubic feet.
The New York Mercantile Exchange contract for January delivery at one point dropped to a new 52-week low of US$4.432 per 1,000 cubic feet yesterday.
The government then reported that the amount of natural gas in storage rose again, surprising most energy experts. The country has never had this much natural gas in storage.
At this time of year, natural gas supplies are getting smaller as people turn on the heat in their homes.
That's not happening this year because the winter has been so mild. Instead, more gas was placed into storage last week, the first time that has happened this late in the year since at least 2001.
The salt caverns and other places where the U.S. stores natural gas are near or at capacity because major industrial power users have been shuttering plants or slowing production. The Energy Information Administration said yesterday that natural gas stocks have set new national records for seven consecutive weeks.
For consumers, that likely means an extended period of cheap energy, though how long that will go on is not clear. But heating bills will be cheaper in most places and power companies that use natural gas also will feel less pressure to raise electricity rates.
Oil prices also fell yesterday despite promising jobs numbers.
Benchmark crude for January delivery gave up 14 cents to settle at US$76.46 a barrel on Nymex. In London, Brent crude for January delivery rose 48 cents to settle at US$78.36 a barrel on the ICE Futures exchange.
The Labor Department said yesterday that the number of newly laid-off workers dropped unexpectedly to the lowest level since the week of Sept. 6, 2008.
Still, the U.S. continues to sip at its petroleum reserves as millions of laid off workers have stayed out of the morning commute. Oil companies are finding it easier to store crude and deliver it later when demand has hopefully picked up.
Refiners that turn crude into gasoline and other fuels have slowed production and even shut down facilities permanently.
"Demand is pretty bad," said Peter Beutel, an analyst with Cameron Hanover. "Refiners just don't have the incentive to run right now. So people will store crude, thinking that something will happen down the road."
That weak demand is also affecting imports.
Oil imports have sunk to the lowest point since the fourth quarter of 1990, when the U.S. was preparing for the first Gulf War, according to analyst Stephen Schork.
At the pump, retail gas prices ticked higher by less than a penny overnight to a new national average of US$2.633 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 5.3 cents cheaper than it was a month ago, but it's still 83 cents more expensive than the same time last year.
Refiners shut down much of their operations last year as energy prices tanked, and they're doing so again. Crude prices are still high enough that refiners are struggling to make a profit converting it into fuel.
In other Nymex trading in January contracts, heating oil increased 1.31 cents to settle at US$2.0495 a gallon and gasoline added less than a penny to settle at US$1.993 a gallon. Natural gas gave up 7.1 cents to settle at US$4.459 per 1,000 cubic feet.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
