Heat wave sends US natural gas storage down, prices up

Continuing unrest in several areas of the world sent crude oil prices higher on Thursday.  Brent crude for September delivery was up 84 cents to $74.84 per barrel, while West Texas Intermediate crude September contracts added 36 cents to $74.30 per barrel.  One factor in the rise of Brent crude is that the troubles in Nigeria have resulted in increased demand for North Sea crude.  Also boosting crude oil prices generally was a claim by Israel’s justice minister that Wednesday’s meeting on the Israel/Lebanon crisis in Rome had resulted in an “authorization” for Jerusalem to continue its operations against Lebanon.

Natural gas prices are also up as energy consumption has soared during the heat wave in the United States.  The weekly storage report from the Energy Information Administration showed that the amount of natural gas in storage declined by 7 billion cubic feet.  Such a decline is very unusual at this time of year, and an increase of 28 billion to 30 billion cubic feet had been expected.  The drop in inventories sent August Henry Hub August contracts on the New York Mercantile Exchange up 24.3 cents to $7.13 per million British thermal units.  With August contracts expiring at the end of Thursday’s session, September Henry Hub added 22.6 cents to $7.20 per million British thermal units.