Natural gas prices fall as government downgrades expectations for hurricane seasonBy Sandy Shore, AP
Thursday, August 5, 2010
Natural gas drops on revised hurricane outlook
Natural gas prices fell Thursday after the government downgraded its hurricane forecast just ahead of the most active period for storms.
Natural gas fell 3 percent. Fewer major storms would lessen the chances of disruptions to oil and gas production in the Gulf of Mexico. That, plus a report showing a decline in electricity use last week, turned the tide against gas.
Natural gas for September delivery fell 13.9 cents to settle at $4.598 per 1,000 cubic feet in trading on the New York Mercantile Exchange.
At the pump, motorists found higher prices in the wake of a recent rally in oil prices. The national average for a gallon of unleaded regular gasoline rose 1.8 cents to $2.765, according to AAA, Wright Express and Oil Price Information Service. It’s up 2.1 cents from a week ago and 18 cents from a year ago.
In its revised forecast, the National Oceanic and Atmospheric Administration said it expected as many as 20 named storms in the Atlantic this season with up to 12 hurricanes. As many as six could become major hurricanes with sustained winds of at least 111 mph.
That compared with a forecast issued May 27 calling for 14 to 23 named storms, eight to 14 hurricanes and as many as seven major hurricanes.
Hurricane season peaks between Aug. 15 and Sept. 15.
More discouraging economic news also weighed on energy prices. Oil dropped after the Labor Department said initial claims for unemployment benefits jumped to 479,000 last week from a 460,000 a week earlier. Economists polled by Thomson Reuters had expected a slight decline.
The department will release its monthly jobs report Friday, which can be a key indicator of economic growth. Analysts say that energy demand will remain constrained until people get back to work in significant numbers. The unemployment rate stands at 9.5 percent.
Benchmark crude for September delivery fell 46 cents to settle at $82.01 a barrel.
In other Nymex trading in September contracts, heating oil lost 1.54 cents to settle at $2.1868 a gallon and gasoline retreated 1.06 cents to $2.1644 a gallon.
In London, Brent crude fell 59 cents to $81.61 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Hungary and Alex Kennedy in Singapore contributed to this report.
Tags: Climate, Commodity Markets, Economic Outlook, Labor Economy, Oil-prices, Prices, Storms, Unemployment Insurance, Weather Patterns