The WSJ reports,"energy prices are tumbling, a setback for investors who were betting that supply shortfalls would drive markets higher.
Natural-gas futures hit a six-month low on Thursday. U.S. oil futures ended slightly higher, snapping a nine-session losing streak, the longest since December 2009.
It is a sharp turnaround for both markets, where investors until recently were overwhelmingly bullish, and a welcome relief for consumers, who had watched gasoline climb steadily for much of this year.
A frigid winter had depleted natural-gas inventories, raising questions about whether producers could replace those stockpiles before temperatures drop again. Escalating violence in Iraq had some money managers worried that fighting would disrupt the country's oil exports.
The steady rise of North American oil-and-gas production has diminished those threats, calming energy markets to a degree that investors and analysts say would have been hard to imagine even five years ago. U.S. gas producers are refilling storage at a record pace, including a bigger-than-expected increase to inventories in government data released Thursday. Iraqi oil shipments have continued unimpeded.
Falling oil prices should help keep a lid on gasoline prices in coming weeks, while the declines in natural gas could mean lower heating bills this winter, a boon to U.S. consumers who still are struggling with sluggish wage growth.
A gallon of regular gasoline cost an average of $3.64 on Thursday, up from $3.50 a year ago but down from $3.67 in early July, the second-highest level ever for Independence Day weekend, according to AAA.
But the prospect of ample energy supplies is disappointing investors who expected rallies staged earlier in the year to last longer. Commodities as tracked by major indexes, which are heavy on oil and gas, performed better than stocks and bonds in the first half of the year.
Natural gas for August delivery ended at $4.12 a million British thermal units on the New York Mercantile Exchange, a 14% drop since June 12. U.S. oil futures ended up 0.6% at $102.93 a barrel, narrowly avoiding their longest losing streak since 1984.
Booming domestic production has helped stabilize energy markets because it would take a bigger disruption in supplies elsewhere to create a shortage and cause prices to spike".
