Natural gas prices jumped 4 percent Thursday after a government report eased concerns that the U.S. could run out of room to store its expanding supply of the fuel. Oil prices moved in the opposite direction, falling 2.5 percent on concerns about U.S. economic growth.
Natural gas futures have rebounded from 10-year lows as supplies fall more in line with average levels for this time of year. The government's latest report said U.S. natural gas supplies rose by 28 billion cubic feet last week, below the 30-34 billion cubic feet that analysts had expected.
The price of natural gas futures added 8.7 cents to end the day at $2.34 per 1,000 cubic feet in New York.
Analysts warned earlier this year that a glut in natural gas was in danger of swelling to a point where the U.S. would run out of storage. Natural gas producers such as Chesapeake Energy Corp., Encana Corp. and ConocoPhillips responded by shutting down some natural gas operations.
Those efforts are starting to make a difference, said independent analyst and trader Stephen Schork.
Supplies are still nearly 50 percent higher than average for this time of year, according to the Energy Information Administration. But they were more than 60 percent above average earlier this year.
Meanwhile, oil prices fell on a batch of reports that raised concerns about U.S. economic growth. The Institute for Supply Management said service companies expanded more slowly last month. And Costco, Macy's and Target reported disappointing April sales.
"The demand picture just isn't very good," said Peter Donovan, a broker with Vantage Trading.
Benchmark West Texas Intermediate crude dropped $2.68, or 2.5 percent, to $102.54 per barrel. Brent crude, which helps set the price for oil imported into the U.S., lost $2.12 to $116.08 per barrel in London.
Analysts noted that U.S. oil supplies have hit a 22-year high in Cushing, Okla., where benchmark West Texas Intermediate crude is delivered. And world oil supplies could be rising as well.
Reuters reported Thursday that OPEC is producing 2.3 million barrels per day above its targets in an effort to push international oil prices back toward $100 per barrel.
The New York Mercantile Exchange also made it more expensive for some traders to buy commodity contracts.
The CME Group, which owns the Nymex, said new federal trading rules directed it to increase the amount of money that certain speculative investors need on hand to buy futures contracts. The increase will likely undercut the amount of contracts they can buy, analysts said, and that tends to weigh on oil prices since a majority of speculative trades are bets that prices will rise.
At the pump, retail gasoline prices in the U.S. were flat at a national average of $3.803 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded has dropped by 13.3 cents since peaking in April at $3.936. Gasoline is also 16.4 cents per gallon cheaper than the same time last year.
In other futures trading, heating oil gave up 5.56 cents to finish at $3.0869 per gallon while wholesale gasoline lost 2.57 cents to end at $3.05 per gallon.
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