Commodity Corner: Natural Gas Drops, Crude Rises
A rise in U.S. commercial supplies, as reported by the Energy Information Administration (EIA), caused natural gas prices to plummet to a record low for the year Thursday.
The front-month contract for natural gas edged a nickel lower Thursday, settling at $3.82 per thousand cubic feet. The EIA reported a net increase of 40 Bcf, totaling 3,052 Bcf of working gas in storage. The increase in inventories can pressure prices. Additionally, analysts anticipate natural gas contracts to decrease over the next few months as the weather cools down and less electricity is used; however, they foresee a spike in the winter when heaters are blasted.
The intraday range for natural gas was $3.79 to $3.94 Thursday.
October oil futures rose Thursday, rebounding from recent declines, after the U.S. Labor Department reported that new jobless claims fell for the first time in a month. According to the government report, first-time applications for unemployment benefits for the week ended Aug. 21 was 473,000 -- a drop of 31,000. To be sure, the four-week moving average did rise to its highest level since November 2009; as a result, the data have become more unpredictable.
Also affecting oil prices was a falling dollar, increasing commodities' appeal. Crude prices settled at $73.32 a barrel, up 84 cents from the previous day. Oil futures traded between $72.54 and $73.98 Thursday.
With hopes of an increase in Labor Day holiday travelers, September gasoline prices rose 4.46 cents, settling at $1.91 a gallon. Gasoline peaked at $1.92 and bottomed out at $1.86.