Oil prices fall, natural gas at new seven-year lows

NEW YORK: Natural gas prices tumbled again Thursday, hitting new seven-year lows as the U.S. pares down on energy usage and more unused supply is put into storage.

In other trading, benchmark crude for October delivery fell 9 cents to settle at US$67.96 a barrel on the New York Mercantile Exchange.

In London, Brent crude dropped 54 cents to settle at $67.12 on the ICE Futures exchange.

On Monday, Spokane, Washington-based utility Avista Corp. said it wants to reduce natural gas prices for its Oregon customers to the lowest levels in five years.

And in the Midwest, Alliant Energy Corp. and Wisconsin Public Service Corp. both predicted heating bills would drop around 20 percent.

That will mean huge savings for a lot of Americans this winter when the heating bill arrives.

"Any savings we get, they get," Alliant spokesman Scott Drzycimski said.

Natural gas for October delivery gave up 20.7 cents to settle at $2.508 per 1,000 cubic feet on the Nymex.

Prices dropped as low as $2.50 per 1,000 cubic feet - the lowest since March 2002 - after the government reported that U.S. natural gas supplies grew again last week and are now nearly 18 percent above the five-year average.

Natural gas, a key energy source for power plants, has plummeted to less than a third the price it fetched last summer, and its contract on the Nymex lost nearly 23 percent in the past six trading days.

The United States Natural Gas fund, an exchange-traded fund that tracks natural gas prices, has fallen steadily this year, giving up 76 percent of its value and it hit a 52-week low of $8.94 a share on Thursday.

On Thursday, the Institute for Supply Management showed that the service sector shrank in August, though hospitals, retailers, financial services companies and other industries covered by its index posted their best reading in 11 months.

Also, the Paris-based OECD said that while the world economy is headed for an earlier recovery than previously forecast, the pace of any rebound will likely remain modest for some time to come.

In other Nymex trading, gasoline for October delivery lost 1.58 cents to settle at $1.7928 a gallon and heating oil fell by 1.55 cents to settle at $1.735 a gallon. - AP