http://biz.yahoo.com/ap/060512/oil_prices.html?.v=19Gas Prices Tumble to Near One-Year LowFriday May 12, 4:24 pm ET By Brad Foss, AP Business Writer Natural Gas Prices Decline to Their Lowest Level in Almost a Year Amid Soaring Inventories WASHINGTON (AP) -- Natural gas futures declined to their lowest level in almost a year on Friday amid soaring inventories of the mostly domestic fuel used to heat homes and produce electricity.Analysts said the price of natural gas could fall even further in the months ahead, given relatively weak demand and expectations of rising supplies, though they cautioned that production in the Gulf of Mexico remains hindered by damage from last year's powerful hurricanes Katrina and Rita."Unless we have a repeat of last summer's hurricane season, we're going to have so much (natural) gas in storage by September that we won't have anywhere to put it," said Daniel Lippe of Petral Worldwide Consulting in Houston.Meantime, oil prices fell but finished the week roughly $2 a barrel higher as traders' concerns about geopolitical threats and refinery snags trumped evidence of rising supplies and forecasts calling for weakening global demand.Crude futures dipped toward $72 a barrel Friday after the International Energy Agency reduced its 2006 world oil demand forecast. Earlier in the week, the U.S. Department of Energy said domestic gasoline supplies increased for the second straight week.Still, oil prices are about 48 percent higher than a year ago, a reflection of the market's fear about real and possible output disruptions at a time when the world's supply cushion is perilously thin. Only Saudi Arabia has any spare production capacity to speak of, analysts say, but it is less than 2 percent of daily global demand of almost 85 million barrels and not the high quality crude that refiners prefer.In Nigeria, violence has curtailed output for months by roughly a half-million barrels per day. And in the Gulf of Mexico, more than 300,000 barrels per day remains shut as a result of damage from last summer's hurricane season.But perhaps the biggest supply related worry is, for now, a theoretical one. Iran, OPEC's second largest producer, refuses to give up its uranium enrichment ambitions and the U.N. Security Council has the power to impose sanctions. Analysts fear Iran could retaliate by withholding oil from the market, even though the country's oil minister has repeatedly said this would not occur.
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