Natural gas futures hit all-time high-again

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Natural gas futures hit all-time high Rise in distillate supplies pulls crude under $29 a barrel

By Myra P. Saefong, CBS.MarketWatch.com Last Update: 10:43 AM ET Dec 6, 2000 NewsWatch Latest headlines Get Alerted

NEW YORK (CBS.MW) -- Natural gas futures climbed to an all-time high Wednesday and traded well above $8 amid expectations that data from a key supply report this afternoon will reveal a drop in supplies bigger than last year.

On the New York Mercantile Exchange, January natural gas rose to a high at $8.80 per million British thermal units just minutes after the start of trading and was last at $8.34, up 95.6 cents or 13 percent.

Shortly before the market closes Wednesday, the American Gas Association will release its weekly data on U.S. natural gas supplies. The report is expected to show that supplies, as of the week ended Dec. 1, fell 75 billion to 100 billion cubic feet, according to a Bridge survey.

During the same period a year ago, supplies fell 69 billion cubic feet, according to a note from IFR Pegasus in New York.

The National Weather Service forecasts warmer-than-normal weather over the next six to 10 days but overall, the note said emphasizing that there may be a technical correction ahead, the whole combination of storage and weather is "bullish."

Oil sinks to four-month low

The strength in natural gas provided some support for crude earlier in the session, but a bigger-than-expected rise in last week's distillate and gasoline inventories pulled crude futures prices below $29 a barrel to its lowest level in four months.

Oil shares were mixed, in tune with the latest reports on crude supplies.

January crude futures declined by 93 cents to $28.60 a barrel, following a drop to $28.20, its lowest level since August 9. January heating oil rose 0.54 cent to 98.20 cents a gallon. January unleaded gasoline fell 1.92 cents to trade at 74.30 cents a gallon.

The American Petroleum Institute reported late Tuesday that crude inventories, as of the week ended Dec. 1, fell 3.7 million barrels, contrary to the Energy Department's Wednesday report of a 2-million-barrel rise. A Bridge News survey of analysts pegged expectations at a rise of 1 million to 1.4 million barrels.

Distillate supplies, which include heating oil, climbed 3.3 barrels the API reported, compared to average survey expectations for a rise of 300,000 barrels to 600,000 barrels. The Energy Department said supplies rose 3.4 million.

Meanwhile, analysts had expected gasoline supplies to be up 1.6 million to 2 million barrels, but the API and Energy Department said last week's inventories rose 3.2 million and 4 million barrels, respectively.

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-- Martin Thompson (mthom1927@aol.com), December 06, 2000


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