Natural Gas Dips to Lowest Since March 2002 on Inventory Gain
September 4th, 2009Via: Bloomberg:
Natural gas futures fell in New York to the lowest level since March 2002 after a government report showed stockpiles expanded more than average to a record for this time of year.
Supplies rose 65 billion cubic feet in the week ended Aug. 28 to 3.323 trillion cubic feet, the Energy Department said. Inventories are the highest for that week since the department began publishing data in 1993. Stockpiles typically gained 64 billion cubic feet for the period in the past five years.
“We’re well supplied and there’s so little demand,” said Michael Rose, director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida. “Some people are starting to question the economic recovery and that adds more pressure to gas.”
Natural gas for October delivery fell 20.7 cents, or 7.6 percent, to settle at $2.508 per million British thermal units at 2:52 p.m. on the New York Mercantile Exchange, the lowest close since March 5, 2002. Gas has dropped 55 percent this year. Today’s decline was the largest in three months. Futures earlier touched $2.50.
Overall U.S. gas consumption may contract by 2.6 percent as the recession that began in December 2007 cuts demand, the Energy Department said in its monthly Short-Term Energy Outlook on Aug. 11.
Gas use at factories is forecast to tumble 8.6 percent this year because of the recession, the department said.
“People are beating up on natural gas because they can,” said Phil Flynn, vice president of research at PFGBest in Chicago. “Supplies are high, so they’re really pressuring the market to the downside.”
