Thursday, September 14, 2006

Natural gas futures drop

This is good news. Natural gas futures have dropped to two year lows on increased supplies. Perhaps we'll actually keep our house at a tolerable temperature this winter.
Natural-gas futures dropped Thursday to their lowest level since April of 2004 after a U.S. government report showed a triple-digit increase in supplies of the fuel for the first time in more than a year.

Natural-gas inventories rose 108 billion cubic feet for the week ended Sept. 8, the Energy Department said. That marked the first triple-digit climb since June 3, 2005, according to First Enercast Financial.

"We are now sitting on over 3 trillion cubic feet of inventories, the highest level for this time of the year in almost 15 years, and the most comfortable stock going into a winter seasons in recent history," said Rakesh Shankar, an economist at Moody's

This is supply and demand at work. Last winter supply was tight and prices increased. Companies used that extra cash to get more supply into the market. And that means this year, our house will not double as a meat locker.

No comments: