NEW YORK - Not even another winter blast for much of the United States could stop energy prices from sliding again on Tuesday.
Crude, natural gas and heating oil prices fell even as below-average temperatures were forecast for much of the eastern half of the country through at least the end of the week. Natural gas prices were off by nearly four per cent.
Benchmark crude for March delivery fell 55 cents to settle at US$74.71 a barrel on the New York Mercantile Exchange. Earlier in the session, it dropped as low as $74.14. In London, Brent crude for March delivery gave up 40 cents to settle at $73.29 a barrel on the ICE Futures exchange.
Markets on Tuesday also were concerned that China's moves to control bank lending would slow the economy of what has become the world's second largest oil consumer.
Cold and snow from before Christmas into the first part of January helped drive oil prices to a 15-month high earlier this month as homeowners from Chicago to Florida cranked up their thermostats .
But even though huge stockpiles of natural gas and heating oil are being whittled down this winter, supplies are ample.
The recession has crushed demand for electricity and natural gas by companies that make cars, steel and appliances. Many utilities have reported industrial consumption was off by as much as 15 per cent to 20 per cent last year.
Industrial customers use nearly 30 per cent of the gas and electricity produced in the U.S. Declining consumption by industrial customers was a key reason why electricity use overall has fallen two straight years for the first time since 1949.
Some longer term forecasts into February show temperatures moderating, which also hurts demand for gas.
Colder temperatures in the near term are "expected to increase demand for heating fuels and electricity generation," Peter Beutel of Cameron Hanover said in his report Tuesday. "As we move forward, the bigger questions with the colder weather are: how cold and for how long?"
Oil analyst and trader Stephen Schork said every time natural gas approaches $6 per 1,000 cubic feet, producers drill more wells.
In other Nymex trading in February contracts, heating oil lost 1.5 cents to settle at $1.9508 a gallon, while gasoline dropped 3.34 cents to settle at $1.9750 a gallon. February natural gas futures fell 23.7 cents to settle at $5.485 per 1,000 cubic feet.