Gas prices at lowest level since August

Natural gas futures fell to their lowest level in almost six months Jan. 26 after the U.S. government released data that showed domestic inventories well above the five-year average for this time of year.

Above-normal winter temperatures in the U.S. have helped moderate demand, soothing a market that had otherwise been jittery because 16 percent of daily natural-gas production in the Gulf of Mexico remains shut-in nearly five months after Hurricane Katrina ripped through the region, knocking out platforms, pipelines and processing plants.

“We’re just so far below normal on our demand projections that there’s just no shortage of natural gas and, in fact, there’s a surplus of natural gas. Surprise, surprise,” said Ed Silliere, who trades natural-gas futures from the floor of the New York Mercantile Exchange.

Natural gas for February delivery fell 23.1 cents to $8.229 per 1,000 cubic feet, the lowest close for the front-month contract since the Aug. 1 settlement of $8.154.

Silliere said if current weather patterns continue through February, he sees natural gas futures sliding all the way to $6.

—The Associated Press