BLBG: Natural Gas Advances as Decline in U.S. Drilling May Signal Reduced Output
Natural gas futures gained for a third day in New York on speculation that production growth will slip as drilling declines.
Gas futures rose as much as 1.5 percent after Baker Hughes Inc. reported May 13 that U.S. natural-gas rigs dropped to the lowest level in 15 months. The gas rig count has fallen 4.9 percent this year.
“Falling rigs are an indicator that you’ll see production taper off in the long run,” said Gene McGillian, an analyst and broker with Tradition Energy in Stamford, Connecticut. “It’s definitely supportive of prices.”
Natural gas for June delivery climbed 4 cents, or 0.9 percent, to $4.286 per million British thermal units at 9:16 a.m. on the New York Mercantile Exchange. The futures have declined 2.7 percent this year.
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To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
