Natural gas prices continued a weeklong rally Thursday on a government report that showed gas in storage increased less than expected last week.
Natural gas prices rose 5.5 cents to settle at $4.339 per 1,000 cubic feet of gas on the New York Mercantile Exchange. Prices have jumped about 9 percent since May 5.
The Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states rose by 94 billion cubic feet last week to about 2.09 trillion cubic feet. Analysts expected an increase of between 100 billion and 104 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Despite than lower-than-expected build, natural gas in storage remains well above normal levels for this time of year. And unlike oil prices, which have been rebounded sharply in the past year, natural gas prices have remained cheap.
The recession has hurt demand for gas as industries and consumers used less energy. Meanwhile producers are pulling more gas from the country's vast underground reserves, pushing supplies higher.
Oil prices continued to slide Thursday. Crude followed the stock market lower, with investors disappointed that jobless claims did not fall as much as expected in the weekly report from the Labor Department. Benchmark crude for June delivery dropped $1.25 to settle at $74.40 a barrel on the Nymex. Prices have fallen about 15 percent in the last 10 days.
The Dow Jones Industrial Average was off about 85 points in mid-afternoon trading.
Oil prices have yet to be affected by the giant spill in the Gulf of Mexico though there is worry that the spill may eventually interfere with tankers carrying imported oil to Gulf ports and vessels moving refined products to other parts of the country.
The well's owner, BP PLC, said Thursday that its costs for trying to stop the gusher, containing the spill and helping Gulf states foot the response tab totaled $450 million, up $100 million since its Monday update to securities regulators. The spill started after an oil rig exploded and sank on April 20.
Lower oil prices are slowly making their way to drivers filling up at the pump. Gasoline prices fell 0.6 cent overnight to a national average of $2.89 per gallon, according to AAA, Wright Express and Oil Price Information Service. Prices have fallen 3.9 cents in the past week, but remain 4.2 cents higher than a month ago and 62.3 cents above year-ago levels.
In other Nymex trading in June contracts, heating oil fell 2.72 cents to settle at $2.1319 a gallon, gasoline lost 1.53 cents to settle at $2.1951 a gallon.
In London, Brent crude was down $1.09 to settle at $80.51 on the ICE futures exchange.
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