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Natural Gas Prices Slump

Supply Rising Faster Than Demand

Written by Stephanie Ginter
Posted April 11, 2012 at 8:03PM

The boom in natural gas production has created steady, above average supplies of natural gas, sending prices south. 

The government reported gas inventories were up 1.4 percent by a net gain of 42 billion cubic feet last week to 2.479 trillion cubic feet, levels that are over 60 percent higher than the five-year average. 

The upsurge in supply induced a dramatic downturn in prices, falling as low as $2.08 late Thursday morning in New York.

The good news is that the surplus in supplies, combined with the mild weather this past winter, will cut electric bills for a good number of U.S. homeowners. 

Analysts expect the pleasant spring weather to continue over the next few months, which will further drive down prices. 

Meanwhile, benchmark crude was up $1.84 to $103.30 a barrel while Brent crude rose 78 cents to $123.12 a barrel. 

The current national average of $3.936 per gallon of gasoline is the highest it's ever been for this time of year, with analysts anticipating it could continue to rise to an unprecedented $4.35 a gallon by the end of this month. 

That's all for now, 

Stephanie

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