Natural Gas Price Lowest in 6 Months

By BRAD FOSS Associated Press

WASHINGTON — Natural-gas futures fell to their lowest level in almost six months Thursday after the government released data that showed domestic inventories well above the five-year average for this time of year.

Mild winter temperatures have helped moderate demand, soothing a market that had otherwise been jittery because 16 percent of daily gas production in the Gulf of Mexico remains shut-in nearly five months after Hurricane Katrina ripped through the region.

“We’re just so far below normal on our demand projections that there’s just no shortage of natural gas and, in fact, there’s a surplus of natural gas. Surprise, surprise,” said New York Mercantile Exchange gas trader Ed Silliere.

Natural gas for February delivery fell 23.1 cents to $8.229 per 1,000 cubic feet, the lowest close for the front-month contract since the Aug. 1 settlement of $8.154.

Silliere said if current weather patterns continue through February, gas could slide all the way to $6.

The Energy Department said domestic storage of natural gas stood at 2.49 trillion cubic feet at the end of last week. While the week- to-week draw of 81 billion cubic feet was larger than the market had anticipated, supplies are considered ample at 8 percent above year- ago levels and 22 percent above the five-year average.