By CHRIS KAHN (AP) – 53 minutes ago
NEW YORK — 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 $4.432 per 1,000 cubic feet on Thursday.
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 Thursday 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 Thursday despite promising jobs numbers.
Benchmark crude for January delivery gave up 14 cents to settle at $76.46 a barrel on Nymex. In London, Brent crude for January delivery rose 48 cents to settle at $78.36 a barrel on the ICE Futures exchange.
The Labor Department said Thursday 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 $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 $2.0495 a gallon and gasoline added less than a penny to settle at $1.993 a gallon. Natural gas gave up 7.1 cents to settle at $4.459 per 1,000 cubic feet.
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Associated Press writers Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.
(This version SUBS 8th graph to correct that oil fell, instead of rose. Moving on general news and financial services.)
Copyright © 2009 The Associated Press. All rights reserved.
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