NatGas Falls as Inventories Rise & Economic Worries MountNatural gas prices fell to an 11-month low on the Aug. 26 DOE inventory report. Stocks of the fuel grew by 40 billion cubic feet during the week, exceeding market expectations.
Natural gas dropped to $3.832 per million BTUS, having falled below the $4 mark a few days earlier. It is still above the September 2009 monthly average of $2.92.
The hot weather (cooling-degree days are 25% above average) had drawn down natural gas surpluses. "This week marked the 10th week in a row that the surplus relative to the 5-year average has declined, as weekly net injections into storage continue to fall short of historical levels," said the DOE weekly natural gas report.
But the moderating of that weather combined with dismal economic news depressed natural gas prices. Existing home sales in July were 27% lower than the year before and jobless claims have begun to rise. Also, the early hurricanes and tropical storms of the season did not appear to threaten the gas producing regions of the Gulf of Mexico.