NEW YORK (AP) — Natural gas prices have dropped by more than 12 percent in the past month as the country continues to sip at its energy reserves and a balmy November allowed homeowners to leave the heat off.
Retail prices for natural gas, or what many consumers will pay to heat their homes, are expected to be substantially lower this year.
Spot prices for natural gas have dropped to almost half of what they were last year, though they've increased slightly this month, according to the Energy Information Administration.
The recession has kept natural gas demand low most of the year. With manufacturers shuttering factories and closing offices, the country is using less electricity and power plants are burning less natural gas.
Analyst Stephen Schork noted that with industrial production still weak, home heating would be the primary source of natural gas demand for the rest of the year.
"What does that say about the current recovery, or lack thereof?" Schork said in a research note.
The U.S. has added more natural gas into storage every week since March 27, and there is now more natural gas tucked away in the U.S. than at any point in history. Storage houses are crammed beyond their listed capacity in the West on the Gulf of Mexico, and they're nearing capacity elsewhere, according to data from the Department of Energy.
With so much in storage, natural gas futures prices have plunged on the New York Mercantile Exchange. The December contract fell from $5.045 to $4.424 per 1,000 cubic feet between Oct. 30 to Friday.
Benchmark crude also dropped Friday, giving up 74 cents to settle at $76.72 a barrel on the last trading day for the December contract. Crude prices for January delivery lost 58 cents to settle at $77.47.
At the pump, retail gas prices increased for the third straight day, adding less than a penny overnight to a new national average of $2.642 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 4.6 cents more expensive than last month and 62.2 cents more expensive than the same time last year, when prices were in free fall.
In other Nymex trading, heating oil fell 2.08 cents to settle at $1.9756 a gallon. Gasoline for December delivery added 1.11 cents to settle at $1.9806 a gallon. Natural gas added 8.2 cents to settle at 4.424 cents per 1,000 cubic feet.
In London, Brent crude for December delivery fell 42 cents to $77.22 on the ICE Futures exchange.
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Associated Press Writers Barry Hatton in Portugal and Alex Kennedy in Singapore contributed to this report.
