NEW YORK - Natural gas prices tumbled Thursday after a government report showed that even after a frigid two-week winter blast, U.S. stockpiles are still well above average for this time of year.
Since March, natural gas held in underground caverns has remained at the high end of the five-year average. That's because some of the biggest energy consumers, industrial plants and manufacturers, have been in a recession-fueled funk.
Even people turning up the heat at home to battle the elements, and utilities using more natural gas because prices have fallen so far, hasn't been enough to offset weak industrial demand.
That's been a big break for consumers who have had a relatively cheap winter to date. Natural gas futures remain about where they were at the start of the year.
The Energy Information Administration said that the country used 266 billion cubic feet of natural gas last week, more than the consensus estimate, but short of an all-time record. There's still 2.85 trillion cubic feet in underground storage.
Natural gas prices dipped 14.5 cents on the inventory report to settle at $5.588 per 1,000 cubic feet on the New York Mercantile Exchange, at one point falling almost 4 per cent.
Energy analyst Jim Ritterbusch said there probably won't be as large a drop in natural gas supplies for the rest of the year. But that doesn't mean heating prices are headed down.
"There's still a lot of winter left," Ritterbusch said. "Prices could still go up if we see larger than normal draws in natural gas."
Meanwhile, retail gas prices ticked higher, adding less than a penny overnight to a new national average of $2.758 a gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 16 cents more expensive than last month and 96.6 cents more expensive than a year ago.
Benchmark crude for February delivery fell 26 cents to settle at $79.39 a barrel on the New York Mercantile Exchange. In London, Brent crude for February delivery gave up 40 cents at $77.91 a barrel on the ICE Futures exchange.
In other Nymex trading in February contracts, heating oil dropped 1.17 cents to settle at $2.0829 a gallon and gasoline gained 1.36 cents to settle at $2.0738 a gallon.
Associated Press writers Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.