Energy Markets Tumble on Nat Gas Data
08/28/08 - 02:46 PM EDT
Chuck Marvin
Crude prices are falling hard and natural gas futures are down nearly 10% in recent afternoon trading Thursday. The declines follow the release of the Energy Information Administration's weekly inventory report, which revealed that natural gas inventories grew considerably more than expected during the week ending Aug. 22.
West Texas crude for October delivery was recently sliding $2.80 to $115.35 a barrel at the New York Mercantile Exchange, and Brent crude was losing $2.22 at $114.00 a barrel. Near-month natural gas is plummeting 73 cents to $7.87 per million British thermal units. Reformulated gasoline was 7 cents weaker at $2.99 a gallon, heating oil was also down 7 cents at $3.19 a gallon, and natural gas was falling 6 cents at $8.54 per million British thermal units. The EIA's natural gas report estimates that working gas in storage increased last week by 102 billion cubic feet to 2,757 billion cubic feet in total underground storage. That increase puts total current storage in the high end of the five-year average range for this time of year. Last week's injection was twice what most analysts were expecting, according to an analyst census conducted by Bloomberg. The increase in natural gas stores was mostly caused by a decline in natural gas consumption, proving yet again that U.S. consumers are adjusting their behavior and spending patterns in an attempt to save money on energy costs. Recently, energy markets have been flooded with reports of falling demand for energy around the globe, which, in concert with a strengthening U.S. dollar, have clobbered crude oil prices down to about $112 a barrel from $148 a barrel just six weeks ago.
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