Stock Market Oil Prices
Natural gas prices increased by 7 percent on Wednesday, December 7, 2009 as a result of a government report that supplies have plummeted for the first time in nine months. Despite this news, crude oil stock market prices fell for the seventh day in a row; for the first time since October of this year, oil prices have fallen to less than $70 a barrel.
Prices increased to some extent on the following day, to almost $73 a barrel.
Despite the drop in oil, natural gas prices increased in direct relation to winter storms pushing cold fronts across the Midwest. In what has been an abnormally mild winter so far, the cold is causing homeowners to turn up the heat for the first time.
Temperatures fell to 10 degrees between Des Moines and Chicago, and freezing wind has created wind chill factors to drop to as low as negative 25 in areas of Wisconsin, Iowa and Illinois, said the National Weather Service.
"The weather is a significant driver here," analyst and trader Stephen Schork said. "It's about as bullish as it can get this year."
"That's unlikely to mean higher heating costs where natural gas is used," says Associated Press reporter Chris Kahn. "Utilities have long since locked in cheap prices and that is passed on to homeowners. A number of utilities have already sent out notifications that rates are coming down. Heating oil is another story because it generally follows the price of oil, which has almost doubled this year. Futures contracts have jumped nearly 40 percent since February."
The freezing weather is moving toward the Northeast, the area with the highest amount of heating oil use in private residences. Central and western New York are expected to see about 18 inches of snow.
"Over the past four weeks, the US consumed on average 18.5 million barrels of petroleum products a day, a decline of 3.0 percent from the same period a year ago," says the Associated Foreign Press.
"Demand remains anemic," said Ellis Eckland, an independent analyst, adding that "people are realizing that US demand is not recovering."
Retail gas prices dropped overnight to a U.S. national average of $2.63 per gallon, said auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded gas is 2.9 cents cheaper than last month, but 94.6 cents more expensive than the same time last year.
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