By Sandy Shore Associated Press
Prices for natural gas prices hit a fresh 10-year low Tuesday as balmy weather stretched across much of the country, keeping demand weak as supplies continued to bulge.
Natural gas dropped 4 cents, or 2 percent, to $2.33 per 1,000 cubic feet in New York trading. Earlier, it hit $2.22 per 1,000 cubic feet, the lowest price since 2002.
The price has dropped about 26 percent this year as a warmer winter meant Americans used less heat for their homes and businesses. About one-quarter of the nation’s electricity is generated using natural gas as well.
Forecasts call for temperatures to be more typical of May than the middle of March this week in most of the country east of the Rockies.
At the same time, booming production has caused the nation’s natural gas stockpiles to build to about 48 percent more than the five-year average. Some energy companies have cut production, but it will take time for that to affect supplies even slightly.
Even if a hot summer generates more demand for electricity to run air conditioners, it isn’t likely to put much of a dent in the supply, PFGBest analyst Phil Flynn said.
In other trading, oil prices rose as the latest government data provided another sign of an improving economy. The Commerce Department said retail sales rose 1.1 percent last month, the biggest gain since September. Consumers paid more for gasoline but also purchased more cars, clothing and appliances.
Benchmark oil rose 63 cents to $106.97 per barrel in New York. Brent crude rose $1.03 to $126.37 per barrel in London.
At the pump, the national average for retail gas increased less than a penny to $3.81 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That’s nearly 30 cents more than a month ago and about 25 cents more than a year ago.
Heating oil futures rose 3 cents to $3.27 per gallon and gasoline futures increased by 4 cents to $3.36 per gallon.