In a response to an article posted earlier, while some speculated that the rising oil prices were due to that cold weather would finally prompt heating demand and cut into domestic supplies, a loss from the increasing rate of oil put a dent in this suspicion. Natural gas for December delivery decreased 3.9% after Tuesday. An Analyst from Summit Energy in Louisville Ky. said "while a lower-than-expected build in reserves might normally propel prices upward, the larger matter of oversupply won out on Wednesday"(Wall Street Journal, Ryan Dezember). Prices for oil dropped because the Energy Information Administration said 19 billion cubic feet of gas were added to U.S. inventories.
Although this small draw back to oil prices seems to deflate the claim that oil prices will rise due to the weather, forecasters still seem hopeful. Over the past few years natural gas supply has grown greatly as companies discover new reservoirs in onshore shale formations. The prices for natural gas have steadily increased and has the analyst form Summit Energy states "We've had a decent rally to get up to $4.20; to push it on further from there is really a step too far"(Wall Street Journal, Ryan Dezember). The sudden decrease might just be due to the prices hitting a ceiling and the new imports of oil to the US inventory. Forecasters predict that the new inventory of supplies will still be cut into within the next few weeks as the temperatures drop, so not to worry for the oil companies of the US.
-Nicole Lombardo
(Wall Street Journal, Ryan Dezember)
http://online.wsj.com/article/BT-CO-20101110-716795.html?mod=WSJ_Energy_middleHeadlines
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