After rebounding early in the week on word that companies were cutting production, natural gas prices fell to a 10-year low on a report of a supply glut.
Natural-gas futures fell to a 10-year low Thursday after the Energy Information Administration’s latest report showed the U.S. has 3.1 trillion cubic feet of natural gas in storage. That level, according to the AP, is 21.4 percent higher than the five-year average. Prices are likely to decline more on forecasts that the winter will remain unusually warm.
Prices dropped 12 cents, or 4.5 percent, to end at $2.60 per 1,000 cubic feet in New York, according to the AP. The drop came just as natural gas had rebounded by about 17 percent from a decade of depressed pricing. The uptick came on the heels of announcements by major energy companies Chesapeake Energy Corp. and ConocoPhillips that they would cut natural gas production by about 600 million cubic feet per day, and Consol Energy said Thursday that it will set aside plans to drill 23 wells in the gas-rich Marcellus Shale region in the eastern U.S.
The decline, noted the AP, is good news for consumers:
Natural gas is used for heating in more than half of U.S. homes and many utilities also burn natural gas to generate electricity. So falling prices should eventually mean lower bills for many consumers.
Read the AP story here.