Natural gas prices climbed Wednesday as President Barack Obama said he wanted the U.S. to use more of it instead of foreign oil. Colder weather also pushed up prices, as forecasters predicted a cold snap for much of the country in coming weeks.
Natural gas for May delivery rose 8 cents to $4.339 per 1,000 cubic feet in afternoon trading on the New York Mercantile Exchange.
Prices rose as Obama announced that he wants to cut the country's oil imports by a third by 2025. The president touted a series of initiatives, emphasizing that the U.S. could rely more on its own natural gas and biofuels to power vehicles and produce electricity.
Fadel Gheit, an energy analyst with Oppenheimer & Co., said the strategy makes sense: "We have abundance of natural gas in this country and the best technology in the world. We should capitalize on that."
Natural gas prices remain in about the same range they've been in for three years as the recession and a surge in domestic production have kept prices in check. The price of oil, which the U.S. imports primarily from Canada, Saudi Arabia and Mexico, has jumped in that period, rising 27 percent in last 12 months alone.
Michael Lynch, president of Strategic Energy & Economic Research, said Obama's continued endorsement of natural gas drilling will convince investors to be more bullish about natural gas. But government policies usually don't affect short-term supply or consumption. Most traders are keeping a closer eye on the weather, which is expected to remain unseasonably chilly in April.
"We're expecting snow," said Lynch, who is based in Winchester, Mass. "Cold weather is going to keep natural gas demand high." That's helped boost prices, he said.
AccuWeather forecasters said Wednesday that chilly weather could linger in northern parts of the country into May or June.
Meanwhile, benchmark crude for May delivery fell 16 cents to $104.64 per barrel on the Nymex. In London, Brent crude added 15 cents at $115.11 on the ICE Futures exchange.
In its weekly report on petroleum supplies, the Energy Department said U.S. crude supplies rose by 2.9 million barrels last week. Gasoline supplies fell by 2.7 million barrels.
Gasoline pump prices continue to rise. The national average added nearly a penny on Wednesday at $3.595 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has jumped by 22.7 cents in the last month and by 80 cents since this time last year.
In other Nymex trading for April contracts, heating oil was flat at $3.0595 per gallon and gasoline added 2 cents at $3.0624 per gallon.
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