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Natural Gas Prices Slide to 15-Month Low

Thursday May 18, 5:02 pm ET
By Brad Foss, AP Business Writer

Price of Natural Gas Falls to 15-Month Low; Producers Warn Consumers of Costly Future

WASHINGTON (AP) -- With the price of natural gas at a 15-month low, the industry that supplies this mostly domestic fuel has a message to consumers: don't get used to it.

Following a warm winter that sapped home-heating demand, U.S. natural-gas inventories have bulged to record springtime levels, and that has caused prices to plummet roughly 60 percent since their mid-December high. Many analysts anticipate a further swelling of inventories in the months ahead and say prices are susceptible to another 20 percent decline.


But the Natural Gas Supply Association, which represents companies that produce the fuel, warns there is no guarantee that the nation's supply cushion will look so comfortable by the end of summer -- let alone next winter, when consumption typically peaks.

If it is an unusually hot summer, association president Skip Horvath argues, homeowners will crank up their air conditioners, which suck up lots of gas-fired electricity. If there is a repeat of last summer's ferocious Gulf of Mexico hurricane season, significant volumes of offshore natural-gas production could be lost. And a colder-than-normal autumn could rapidly deplete inventories before winter.


The price of natural gas to be purchased in February is almost $11 per 1,000 cubic feet -- or more than 80 percent above the price of fuel deliverable in June.
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