- Legal discrimination complaint, ethics complaint filed in Scott City government (3/22/17)11
- Business notebook: Cape native goes from farm to mobile-food operation (3/20/17)1
- Mall aboard: Future requires evolution at West Park Mall (3/24/17)12
- Former Scott City administrator: 'I was forced to resign' (3/21/17)6
- Triplett manslaughter case set for July 2018 (3/21/17)2
- Former Southeast softball coach sues Board of Regents; seeks damages and her job back (3/23/17)11
- Two people found dead in Advance house fire (3/21/17)
- Two local lawmakers back charter school bill; Perryville lawmaker objects to measure (3/19/17)23
- Two Cape men charged with second-degree murder of Grandi (3/21/17)2
- Cairo man pleads guilty to bank murders (3/17/17)1
Prices for natural gas soar to 19-month high
NEW YORK -- The wholesale price of natural gas spiked to a 19-month high Thursday after the government reported a sharper-than-expected decline in supplies.
Wholesale prices for gasoline and heating oil also rose as political unrest persisted in Venezuela, a key exporter of crude oil, and OPEC members pursued a plan to curb production.
Homeowners could experience slightly higher heating bills as early as January if prices were to plateau, but analysts said the country still has access to enough natural gas and heating oil to avoid any kind of serious impact on consumers.
The price of natural gas to be delivered in January soared as high as $5.15 per 1,000 cubic feet on the New York Mercantile Exchange before settling at $5.10, up 39 cents. It was the highest closing price since April 23, 2001 for natural gas, which is used to heat homes and produce electricity.
The Energy Information Administration, the statistical arm of the Energy Department, said Thursday that the amount of natural gas in storage declined last week by 162 billion cubic feet to 2.794 trillion cubic feet, or 14 percent below year-ago levels.
"That's a pretty healthy draw," said Ed Kennedy, managing director at Commercial Brokerage Corp. in Miami.
Kennedy and other analysts had been expecting supplies to decline between 120 billion and 150 billion cubic feet.
Futures prices for crude, gasoline and heating oil rose Thursday as the strike that has paralyzed Venezuela's oil industry went into its 11th day and OPEC representatives agreed on a plan aimed at reducing production.
In Nymex trading, January crude rose 61 cents to $28.01 per barrel, gasoline climbed 3.32 cents to 80.71 cents per gallon and heating oil was up 2.38 cents at 79.25 cents per gallon.
On London's International Petroleum Exchange, January Brent futures surged 62 cents to $26.87 a barrel.
The general strike in Venezuela has caused energy prices in the United States to creep higher. But analysts said so far there has been enough of a supply cushion to moderate prices.
"December is a month where supply outstrips demand," said Tom Kloza, director of the Oil Price Information Service, a Lakewood, N.J., publisher of industry data.
A variety of factors conspired to push natural gas prices higher on Thursday, analysts said.
Stung by lower prices earlier in the year because of ample supplies, natural gas producers scaled back dramatically and have been tentative about drilling new wells in recent months.
As of Dec. 6, there were 705 rigs drilling for natural gas in North America, compared with 769 a year ago, according to Baker Hughes, an oil services company that tracks industry data.
The decline in production is finally beginning to show up in a meaningful way in supply data, analysts said.
Another factor in Thursday's price spike was that forecasters at AccuWeather predicted below normal temperatures in January along the East Coast.
Ron Gist, a natural gas analyst at the Houston-based energy consultancy Purvin & Gertz, said while traders were surprised by the supply data, "it's not like there's a crisis here."
Current supplies are within the five-year range for this time of year and well above the levels seen in December 2000, when prices approached $10 per 1,000 cubic feet at the end of the month.
Gist said traders may have overreacted to the government's supply report and that prices could fall just as quickly as the rose.
If natural gas futures stay above $5 for the remainder of the month, however, Gist said consumers could see it reflected in their monthly bills as early as January. Should warmer weather prevail through the end of the month, as AccuWeather has predicted, prices could come down before then, Gist said.