NEW YORK — A three-week rally in natural gas prices paused Thursday after the government reported a huge build in supplies, more evidence of a severely weak industrial sector.
NEW YORK — A three-week rally in natural gas prices paused Thursday after the government reported a huge build in supplies, more evidence of a severely weak industrial sector. Natural gas, a key energy source for power plants, had been trading higher most of June, though it still fetches less than a third of last year’s price. Meanwhile, retail gas prices climbed higher for the 51st straight day, and oil prices wavered with some signs of improvement in the economy as a whole. "Four-week gasoline demand was up 1.14 percent, confirming last week’s foray into positive territory and showing the first genuine sign that the economy is really improving," Cameron Hanover analysts said in a report. "Even with millions not going to work, Americans are using more gas again." Pump prices added 0.6 cents overnight to a new national average of $2.685 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of gas is 37.1 cents higher than last month, though it is $1.39 cheaper than the same period last year. Benchmark crude for July delivery rose 47 cents to $71.50 a barrel on the New York Mercantile Exchange. In London, Brent prices added 21 cents to $71.06 a barrel on the ICE Futures exchange. Oil has doubled since March on investor optimism that the global economy is recovering from its worst slowdown in decades. The government reported Thursday that the nation’s unemployment numbers dropped for the first time since January. The Labor Department said total unemployment insurance claims fell by 148,000 to 6.69 million for the week ending June 6. More positive news came out of a private research firm that tracks economic activity. The Conference Board said its forecast for economic activity in May grew the most in more than five years. But heavy industries have been hit especially hard during the recession, which is the biggest reason why natural gas prices have plunged. Earlier this week, the Federal Reserve said production at U.S. factories, mines and utilities dropped 1.1 percent last month, the biggest decline since March. Numbers like that will likely mean cheaper heating costs for millions of consumers because demand for natural gas has fallen so far. Natural gas prices fell again after the Energy Department’s Energy Information Administration said in its weekly report Thursday that supplies in storage rose by 114 billion cubic feet. Natural gas for July delivery dropped 13.7 cents to $4.116 per 1,000 cubic feet. In other Nymex trading, gasoline for July delivery fell less than a penny to $2.029 a gallon, and heating oil dropped 1.37 cents to $1.8493. Associated Press writers Ernest Scheyder in New York, Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report. ______ Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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