MW: Natural gas falls below $4 amid ample supplies
By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) — Natural-gas futures on Friday fell 1.6% to $3.98 per million British thermal units, dropping back below $4 for the first time since Nov. 19.
Phil Flynn of commodities trading firm PFG Best said it’s also the first time that natural gas has fallen below the $4 mark in the month of December since 2001.
“If you go back over the last few years, in December it’s cold and the prices go up,” Flynn said. “To be under $4 is almost unheard of. ... This is historic.”
Normally, demand rises during the onset of winter, but this year, plentiful supplies from U.S. domestic gas production have helped keep prices down, Flynn said.
Also on Friday, crude-oil futures fell 0.6% to $87.20 a barrel.
Oil has been on a downward path since early this week, when the Federal Reserve signaled no new stimulus under its quantitative-easing program of buying up billions in U.S. Treasury securities, cooling off demand for some commodities.
U.S. doubles reserve estimate for natural gas
The move in natural-gas prices comes a day after the Energy Information Administration increased its estimate of technically recoverable, unproved U.S. shale-gas resources to 827 trillion cubic feet — more than double its estimate of 347 trillion cubic feet back in October.
The higher estimate reflects “additional information that has become available with more drilling activity in new and existing shale plays,” the government said Thursday in its Annual Energy Outlook 2011 Early Release Overview.
