Natural gas price drops 4 percent

The futures contract for natural gas tumbled 4 percent Thursday after the government reported that supplies grew for the first time this year, adding to already bloated reserves.

The country had been burning large volumes of natural gas to heat homes and run power generators this winter as heavy snowstorms blanketed parts of the country. But the drawdown wasn’t enough to erase huge surpluses built up during the past few years.

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The Energy Information Administration said that at 1.63 trillion cubic feet, natural gas levels are 8 percent higher than the five-year average.

Natural gas for April delivery dropped 15.9 cents, or 4 percent, to $3.946 per 1,000 cubic feet, on the New York Mercantile Exchange. Prices fell as low as $3.940 earlier in the day, the lowest on record for the April contract.

Meanwhile, oil prices gained after the Labor Department reported that jobless benefits dropped more than expected last week, before falling back later in the day. Benchmark crude for May delivery was down 2 cents at $80.59 a barrel on the Nymex.

Gasoline demand should rise as more workers get back into the daily commute, but some analysts worry that it won’t happen soon.

“It’s reasonable to assume the unemployment rate in the U.S. will remain stubbornly high for at least the next two years,” energy analyst Stephen Schork said in a report. “The table appears set for further demand destruction for gasoline, not just in the U.S., but in Europe as well.”

Retail prices dipped less than a penny overnight to a new national average of $2.813 a gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 15.3 cents more expensive than it was a month ago and 82.7 cents more expensive than the same time last year.

In other Nymex trading in April contracts, heating oil fell less than a penny to $2.0665 a gallon, and gasoline lost 0.57 cent at $2.2155 a gallon.

In London, Brent crude gained 4 cents at $79.66 on the ICE futures exchange.

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