Natural gas price falls after supply report

NEW YORK — The price of natural gas dropped Thursday for the first time in a week, after the government said U.S. supplies are still well above what’s normal for this time of year.

A report from the Energy Information Administration on Thursday showed the U.S. had 3.1 trillion cubic feet of natural gas in storage — a level that’s 21.4 percent higher than the five-year average.

Natural gas futures fell 12 cents, or 4.5 percent, to end at $2.6050 per 1,000 cubic feet in New York.

Natural gas is used for heating and by some utilities to generate electricity. So falling prices should eventually mean lower bills for many consumers.

The price of natural gas had rebounded by about 17 percent from a 10-year low over the past few days. That followed announcements by major energy companies that they would reduce gas production. Chesapeake Energy Corp. and ConocoPhillips said they would cut natural gas production by about 600 million cubic feet per day. And Consol Energy said Thursday that it will set aside plans to drill 23 wells in the gas-rich Marcellus Shale region in the eastern U.S.

But analysts don’t think it’s enough to significantly reduce the nation’s huge supplies.

“There’s an awful amount of gas,” said Gene McGillian, a broker and analyst at Tradition Energy. “We need to see more and more producers make cuts.”

U.S. natural gas supplies have grown over the past few years as companies use new techniques to tap vast deposits of petroleum-rich shale.

Meanwhile, benchmark oil prices rose on Thursday after new reports on jobs and manufacturing pointed to a steadily improving U.S. economy that will need more oil.

The Commerce Department said orders for long-lasting, durable goods rose in December, and a private survey showed a range of economic indicators got stronger at the end of 2011.

The jobs market appears to be improving, even after a modest increase in unemployment claims last week.

Benchmark crude on Thursday rose 30 cents to finish at $99.70 per barrel in New York. Brent crude, which is used to price foreign oil imported by U.S. refineries, rose by 93 cents to $110.74 in London.

Meanwhile, retail gasoline stayed at a national average of $3.38 per gallon, according to AAA, Wright Express and Oil Price Information Service. In Houston, the average price was $3.265 a gallon.

In other energy trading, heating oil rose 3 cents to finish at $3.05 per gallon and gasoline futures rose about a penny to end at $2.85 per gallon.