NEW YORK (AP) – Energy prices dropped Thursday as dismal job news, a sinking stock market and a lower-than-expected draw on natural gas supplies dimmed hopes for stronger energy demand.

Benchmark oil for March delivery fell $3.62 to $73.35 a barrel on the New York Mercantile Exchange. Earlier, crude went as low as $72.86. In London, Brent crude for March delivery shed $3.55 at $72.37 a barrel on the ICE Futures exchange.

Natural gas prices slid 14.6 cents to $5.273 per 1,000 cubic feet, after the Energy Information Administration said that the country’s glut of natural gas only dropped by 115 billion cubic feet. Analysts expected it to shrink much more.

The recession slowed demand for natural gas to heat homes, and to run power plants and factories. As a result, the nation is sitting on a massive supply of gas. The government said stocks are brimming at 2.41 trillion cubic feet, well above the five-year average for this season.

Meanwhile, the Labor Department reported an unexpected rise in jobless claims, raising more concern about the economy and when it might get back on track. It was the fourth increase in the past five weeks.

The news pushed the stock market lower, with the Dow Jones industrial average down about 200 points in midday trading. The dollar climbed against the Euro for the second day in a row as bleak economic news and slumping commodity prices sent investors to the safer haven of the U.S. greenback.

In other Nymex trading in March contracts, heating oil fell 8.72 cents to $1.9322 a gallon, while gasoline dropped 8.13 cents to $1.9549 a gallon.

Associated Press writer Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.

Buzz up! 3
SendSharePrint

If you enjoyed this post then Subscribe to Savvy Investor via RSS