WASHINGTON -- Natural gas futures fell to a 4 1/2-month low yesterday, beaten down for the third straight day because of a mild start to the US winter that has tempered supply concerns.
The Energy Department reinforced those feelings yesterday with a report that showed a surprising increase in natural gas inventories last week.
February natural gas futures slid 69.8 cents to settle at $9.499 per 1,000 cubic feet on the New York Mercantile Exchange, putting the front-month contract 40 percent below its peak of $15.78 on Dec. 13.
It was the lowest settlement for front-month natural gas since Aug. 19, when futures closed at $9.111. Shortly thereafter, natural gas prices soared in the aftermath of Hurricane Katrina's destruction of Gulf of Mexico platforms, pipelines and processing plants.
Crude-oil and heating-oil futures also declined, though prices in the petroleum complex have been in an uptrend since mid-December and analysts are cautioning that the cost of refined products such as gasoline are likely to rise as the year progresses.
Analyst Tom Kloza of Wall, N.J.-based Oil Price Information Service. Kloza said he would not be surprised to see the average retail price of gasoline in the United States, now $2.25 a gallon, climb by 75 cents over the next nine months.
Light sweet crude for February delivery dropped by 63 cents to settle at $62.79 per barrel on Nymex, where gasoline futures were up less than a penny to settle at $1.787 a gallon, and heating oil futures dipped 2.96 cents to close at $1.7881 a gallon.