NEW YORK (AP) — The price of natural gas fell Thursday after the government reported a surprisingly large increase in supply.
Natural gas gave up 5.3 cents to $2.088 per 1,000 cubic feet in New York. Prices have tumbled this year to levels last seen a decade ago because of a production boom that's kept the nation well stocked in gas.
A bigger than normal surplus, combined with mild winter weather, cut heating bills for the majority of U.S. homeowners who burn natural gas for heat. Summer electric bills should also decline because many utilities use natural gas to generate power.
The latest government data shows that the energy industry continues to deliver natural gas at a faster rate than Americans can consume it. The Energy Information Administration report said U.S. supplies expanded by 42 billion cubic feet last week. That pushed the country's total supply to a level that's 60.5 percent higher than the five-year average.
Analysts were expecting supplies to grow between 33 billion to 37 billion cubic feet, according to Platts, the energy-information arm of McGraw Hill.
Weather will help determine the where prices go from here. Forecasters are calling for a pleasant spring throughout much of the country. Other than a possible chance of snow in Maine, AccuWeather.com meteorologist Alex Sosnowski said he expects this weekend to be tranquil across the Southeast, Midwest and West.
Analysts are betting on good weather and even lower natural gas prices. They're "going to continue to go down," said independent commodities trader and analyst Stephen Schork. He expects natural gas to dip below $2 per 1,000 cubic feet at some point this year. That would be the first time since September 2001.
Schork said the price should fluctuate with forecasts for summer weather. A heat wave would boost power demand — and natural gas prices — as people switch on their air conditioners.