Natural Gas Futures Advance as Recession Shows Signs of Easing
May 04, 2009
http://www.firstenercastfinancial.co...
By Reg Curren
May 4 (Bloomberg) -- Natural gas gained for a second day in New York on speculation demand for the industrial fuel will begin to recover as the U.S. economy emerges from a recession.
Gas advanced as a Commerce Department report today showed spending on U.S. construction projects unexpectedly advanced in March, rising for the first time in six months. A recovery in construction would help boost demand for gas from industrial consumers and power-generators, which together account for 58 percent of U.S. demand.
“Every little thing that is positive out of the economy shows that industry is getting a foothold,” said Michael Rose, a director of trading at Angus Jackson Inc., a brokerage in Fort Lauderdale, Florida. “We’re going to see things get worked out, rather than unravel. Natural gas needs the stimulus package to take hold and start creating some industry movement.”
Natural gas for June delivery rose 17.9 cents, or 5.1 percent, to settle at $3.725 per million British thermal units at 2:52 p.m. on the New York Mercantile Exchange. Prices have dropped 34 percent this year.
The U.S. government approved a $787 billion economic- stimulus package in February to help revive the economy, which may boost demand for energy.
Gas has declined this year as companies including Chrysler LLC and General Motors Corp. idled plants because of tumbling demand. Gas use by factories in the U.S. may drop 7.4 percent this year as the recession cuts demand, the Energy Department said in a report on April 14.
Chrysler filed for bankruptcy protection on April 30 and General Motors may have to follow the same route.
