Thursday, April 26, 2012
Natural gas futures are rising off 10-year lows Thursday as drillers cut production in response to lower prices and utilities use more of the cheap fuel to generate electricity.
The U.S, government also reported Thursday that natural gas in storage rose by 47 billion cubic feet to 2.548 trillion cubic feet for the week ended April 20. That was in line with what analysts expected, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. It matches the five-year average rise in inventories for this time of year.
Natural gas rose to $2.135 per thousand cubic feet, a gain of 3.2 percent.
A historically warm winter and increased domestic production have boosted the amount of natural gas in storage well beyond its 5-year average. Prices have fallen to their lowest levels since 2002. This makes drilling unprofitable in most locations, so drillers have cut back.
Meanwhile the low prices are making the fuel more attractive to utilities.
Oil prices rose slightly to $104.21, a gain of nine cents.
Retail gasoline fell to a national average of $3.83 per gallon, the tenth straight day of declines.