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Natural Gas Declines as Inventories Grow

October 26, 2012 at 1:46 by Vladimir Vyun

Futures for natural gas declined as US inventories grew. The Energy Department reported that stockpiles increased by 67 billion cubic feet to 3.843 trillion cubic feet last week, matching analysts’ forecasts. The increase was bigger than five-year average growth for a week of 65 billion cubic feet.

Inventories may climb even further as supply is expected to increase. According to Baker Hughes Inc., the number of rigs that were drilling for natural gas in the United States increased by five to 427 last week. Consumption, on the other hand, is not likely to rise as forecasters predict warmer-than-usual weather till the end of this week.

November futures for delivery of natural gas declined as much as 1.6 cents to $3.434 per million British thermal units on NYMEX, reaching the lowest price since October 8. Prices have fallen 6.1 percent from a year ago.

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