Newspaper article THE JOURNAL RECORD

Higher-Than-Expected Supplies Cause Prices for Natural Gas to Take a Plunge

Newspaper article THE JOURNAL RECORD

Higher-Than-Expected Supplies Cause Prices for Natural Gas to Take a Plunge

Article excerpt

Natural gas prices plunged in trading on the New York Mercantile Exchange Thursday after a storage report showed higher-than- expected supplies.

Other energy futures prices also dropped for the second straight day as worries about stockpiles of fuel eased.

Light sweet crude for November delivery dropped 81 cents to $24.26 a barrel; November heating oil dropped 3.05 cents to 70.92 cents a gallon; November unleaded gasoline fell 2.07 cents to 63.52 cents a gallon; and November natural gas fell 9.9 cents to $2.371 per thousand cubic feet. Spot prices fell 75 cents a barrel across the board, with Phillips 66 Co., Koch Oil Co. and NGC Oil Trading & Transportation Inc. posting Oklahoma Sweet and West Texas Intermediate at $22.75 a barrel. NGC priced Central Oklahoma Sweet at $23 and Oklahoma Sour at $21.40. Koch priced Oklahoma Sour at $20.90 a barrel. A report from the American Gas Association released after the market closed Wednesday showed that 94 billion cubic feet of natural gas was injected into storage for the week ending Oct. 4. Traders expected the refill rate to be between 60 and 80 billion cubic feet, and therefore the report pressured natural gas prices down. Ron Barone, a natural gas analyst for PaineWebber Inc., said he expected the drop in natural gas prices to be temporary. He said refills occurring now should be significantly lower than last week's because Hurricane Josephine disrupted production in the Gulf of Mexico. He also noted colder than normal temperatures in the Midwest are forecast to hit the Northeast this weekend, which will increase consumption. Ed Kevelson, an oil analyst with Paribas Futures Inc., said speculation that the U.S. government may try to intervene to keep heating oil prices lower this winter season helped drive those prices down. Energy Secretary Hazel O'Leary has scheduled a news conference next week to discuss the matter. …

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