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Energy update: Natural gas prices tumble

The price of natural gas dropped Thursday for the first time in a week after the government said U.S. supplies are still well above what's normal for this time of year.

| Published: January 27, 2012 Comment on this article

Oil update

Gas glut kindles U.S. price cuts

NEW YORK — The price of natural gas dropped Thursday for the first time in a week after the government said U.S. supplies are still well above what's normal for this time of year.

A report Thursday from the Energy Information Administration showed the U.S. had 3.1 trillion cubic feet of natural gas in storage — a level 21.4 percent higher than the five-year average. Natural gas futures fell 12 cents, or 4.5 percent, to end at $2.6050 per 1,000 cubic feet in New York.

Natural gas is used for heating in more than half of U.S. homes and for generating electricity in power plants. The price of natural gas had rebounded by about 17 percent from a 10-year low over the past few days. That followed announcements by major energy companies that they would reduce gas production. Chesapeake Energy Corp. and ConocoPhillips said they would cut natural gas production by about 600 million cubic feet per day. And Consol Energy said Thursday that it will set aside plans to drill 23 wells in the gas-rich Marcellus Shale region in the eastern U.S.

ASSOCIATED PRESS