The commodity price for natural gas in the U.S. hit a 10-year low yesterday after a government report of a larger-than-expected jump in supplies. There’s now more natural gas in storage than the entire country uses in a month.
The futures price dropped sharply in New York after the government reported that natural gas inventories expanded well beyond what analysts expected. The country’s total supply grew by 57 billion cubic feet last week to a level that’s now 59 percent above the five-year average.
There’s enough gas in storage to supply all the country’s needs for more than a month, and analysts say storage facilities across the U.S. will be pushed close to capacity in coming months.
"We’ll be testing the top," energy analyst Steve Smith said.
The U.S has enjoyed a bounty of natural gas for the past few years thanks to advances in well drilling that have allowed energy companies to tap vast, petroleum-soaked layers of shale rock. The boom in production wasn’t as noticeable at first, Smith said, because of unseasonably warm summers and cold winter s forced homeowners to use more gas.
"All of a sudden, after a mild winter, the glut has been visible for all to see," Smith said.
Natural gas futures plunged by 13 cents, or 5.7 percent, to $2.15 per 1,000 cubic feet in Thursday afternoon trading.*
*Binghamton (NY) Press & Sun-Bulletin/AP (Mar 29, 2012) – Natural gas price drops to a 10-year low