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Published Monday, May 8, 2000
Natural Gas Prices Soar
By DAVE CARPENTER / AP Business Writer
Natural gas prices rocketed 5 percent higher Monday as a northeastern U.S. heat wave intensified concerns that summer demand will outstrip supplies.
The price rise highlighted strong gains for energy products on the New York Mercantile Exchange. Crude oil futures shot to a six-week high and gasoline and heating oil also jumped more than 3 percent.
In other commodity markets, corn and cocoa tumbled.
Hotter-than-usual weather in the densely populated Northeast in recent days, including temperatures in the low 90s in some places, has sent residents reaching for their air-conditioner knobs at a time when energy supplies are already stretched.
With summer' s heat just ahead, there' s concern now that the industry won' t be able to refill inventory before the next heating season.
" This is kind of a critical period for natural gas because at the end of March you start injecting storage, and storage injections have been very slow, " said Bill O' Grady, energy analyst for A.G. Edwards & Sons Inc. in St. Louis.
" The faster it gets warm, the more natural gas is going to be used and the less is going to be there to inject for storage, " he said. " It' s raising fears that if it' s doing this in early May, maybe it' ll do it all summer -- although of course it won' t."
Natural gas for June delivery rose 14.5 cents to $3.17 per 1, 000 cubic feet -- an increase that nearly doubled the amount of Friday' s decline.
Crude' s rise was attributed to a continuing strike by private-sector workers in Norway which is reducing production by about 1 million barrels a day, and to indications from OPEC that there are no current plans to increase production in June.
June intermediate crude rose 80 cents to $28.09, while June heating oil rose 2.27 cents to 69.58 cents a gallon and June unleaded gasoline rose 3.73 cents to 94.08 cents a gallon.
On London' s International Petroleum Exchange, Brent crude from the North Sea rose 79 cents to $26.08 a barrel.
Corn took the biggest fall when weather forecasts calling for as much as two inches in the Midwest this week provoked a selloff of grains and soybeans on the Chicago Board of Trade.
The soggy weather would wash away some of the concerns about a potentially severe drought impact this year.
July corn fell 7 1/4 cents to $2.41 a bushel, while July soybeans fell 7 cents to $5.59 a bushel, July wheat fell 4 cents to $2.68 3/4 a bushel and July oats fell 1 3/4 cent to $1.23 1/4 a bushel.
Cocoa slumped on still-lackluster world demand. Months after the top crops from West Africa hit the market, they have yet to be absorbed and supplies remain plentiful.
July cocoa settled $23 lower at $778 a ton on New York' s Coffee, Sugar and Cocoa Exchange.
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Natural gas futures
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