BLBG: Natural Gas Futures Gain as Lower Prices May Attract Buyers
Natural gas advanced in New York on speculation that a 33 percent drop in prices this year will prompt utilities and storage companies to buy the fuel to use now or store for use next winter.
Gas futures have tumbled on reduced demand from factories and power plants during the recession. President Barack Obama gave General Motors Corp. and Chrysler LLC one last chance to “fundamentally restructure” their businesses. Industrial users account for about 29 percent of gas consumption.
“We’re dirt cheap here,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania, an energy markets consultant. “Eventually buyers are going to come in and swoop this up. There’s more risk to the upside.”
Natural gas for May delivery rose 2 cents, or 0.5 percent, to $3.757 per million British thermal units at 12:11 p.m. on the New York Mercantile Exchange. It earlier fell to $3.676 per million Btu, the lowest ever for the May contract, which began trading in April 2003.
Some companies may be trying to profit from storing gas now and selling it next winter. Gas for delivery in January is about $2, or 53 percent, more expensive than gas for May use.
