NEW YORK ? The price of natural gas dropped back to near a 10-year low Wednesday after Exxon Mobil and other energy companies declined to cut production.

Exxon, America’s biggest natural gas producer, has led a push by major industry players into U.S. gas drilling over the past few years that has boosted production to the highest levels ever. Supplies in storage are well above average, and some experts estimate the nation has enough natural gas to meet its needs for a century.

Investors hoped that Exxon would follow smaller competitors like Chesapeake Energy and shut down some natural gas rigs. But when it released its quarterly and annual earnings results Tuesday, Exxon said it hasn’t pulled back.

“We remain bullish on the future of natural gas as an energy source,” Exxon investor relations chief David Rosenthal said.

The company has started to shift its focus to developing more oil and other liquid hydrocarbons in the U.S., but “we have not curtailed any gas production,” Rosenthal said.

On Wednesday the price of natural gas fell 12 cents, or nearly 5 percent, to finish at $2.38 per 1,000 cubic feet in New York. That follows an 8 percent drop on Tuesday. Natural gas hit a 10-year low of $2.32 per 1,000 cubic feet on Jan. 19. The price rose briefly, after Chesapeake and other companies said they would cut natural gas production. It slid back as investors lost faith that the reductions would significantly impact supplies and mild winter weather persisted, keeping demand weak.

Independent energy analyst Jim Ritterbusch said traders have been looking for signs that other producers will do more to shrink America’s huge natural gas surplus. It doesn’t appear that they’re willing ? or able ? to do so.

“The market is craving news about production cuts or colder weather” that would force homeowners to crank up the heat, he said. “It’s not getting it.”

A sustained decline in natural gas prices will benefit the U.S. economy by reducing heating and electricity costs for many homeowners and businesses. More than half of U.S. residences use natural gas for heat. And power companies are increasingly turning from coal to cheaper, cleaner natural gas to run generators.

Meanwhile the price of benchmark oil was lower Wednesday. West Texas Intermediate crude fell 87 cents to end at $97.61 a barrel in New York. Brent crude rose by 58 cents to finish at $111.56 a barrel in London.

Prices slipped after economic reports showed that the nation’s crude supplies rose last week and energy demand remains weak.

The Energy Department said oil and gasoline demand dropped last week while supplies grew. At the same time, a trade group reported that manufacturing activity in the U.S. rose in January at the fastest pace in seven months, implying more demand for oil in the months ahead.

Retail gasoline prices added less than a penny on Wednesday at a national average of $3.45 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 17 cents higher than it was a month ago and 35 cents more than a year ago.

In other energy trading, heating oil lost a penny to finish at $3.05 per gallon. Gasoline futures were virtually unchanged at $2.89 per gallon.

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Follow Chris Kahn on Twitter at http://twitter.com/ChrisKahnAP

Source: http://us.rd.yahoo.com/dailynews/rss/energy/*http%3A//news.yahoo.com/s/ap/20120201/ap_on_bi_ge/oil_prices

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LAS VEGAS (Reuters) ? President Barack Obama pitched a plan on Thursday to boost U.S. use of natural gas and open more land for offshore drilling during a campaign-style tour aimed at bolstering confidence in his economic stewardship.

At a stop in Las Vegas, Nevada, the Democratic president sought to counter Republican criticisms of his energy policies as he proposed tax incentives for companies to buy natural gas trucks, which would help build demand for abundant domestic supplies of the fuel.

Republicans have hammered Obama on his handling of the energy issue, and were angered by his decision to block the Keystone XL Canada-to-Texas oil pipeline, which they say would have created jobs and reduced U.S. dependence on oil from the Middle East.

Obama said the United States needs an “all-out, all-in, all-of-the-above strategy” to develop energy resources at home and that doing so would create American jobs. Critics complain that Obama, gearing up for the November 6 election in which he is seeking a second term, favors a green agenda over traditional oil and gas energy development.

“A great place to start is with natural gas,” Obama said during a visit to a UPS facility in Las Vegas, which received stimulus funding to invest in liquefied natural gas vehicles and build a public LNG refueling station.

“We’ve got a supply of natural gas under our feet that can last America nearly a hundred years,” he said. “Developing it could power our cars, our homes, and our factories in a cleaner and cheaper way. The experts believe it could support more than 600,000 jobs by the end of the decade.”

Obama, seeing some improvement in his poll numbers, is touring five states – Iowa, Arizona, Nevada, Colorado and Michigan. The trip follows his State of the Union address on Tuesday in which he took a combative tone toward congressional Republicans and spoke of the need to reduce income inequality.

Obama’s overall approval ratings had sagged amid voter concern over the lackluster economy, but his popularity has inched higher and in some recent surveys has climbed above the important 50 percent threshold.

In Tuesday’s address to a joint session of Congress, Obama spoke of the nation’s booming natural gas sector, which has grown dramatically in recent years as advances in technology have unlocked vast new reserves.

Later on Thursday, Obama will visit Buckley Air Force Base in Aurora, Colorado, where the Air Force is installing a one-megawatt solar panel system, and where last year it test-piloted jets that run on advanced biofuels.

A CLEAN ALTERNATIVE?

Increasing domestic natural gas consumption would benefit drillers, as U.S. natural gas prices have fallen sharply because of the growing glut and the relatively warm winter.

Using domestic natural gas as a cleaner alternative to importing foreign oil has been heavily promoted by Texas oil billionaire T. Boone Pickens and has attracted support from both sides of the aisle in Congress.

Still, Obama’s natural gas truck proposal, which would need congressional approval, could face an uphill battle to make it into law. Republicans, campaigning on promises to cut government spending, would likely resist costly energy subsidies.

Similar measures aimed at expanding tax breaks for natural gas vehicles have failed to break through partisan gridlock, and conservative groups have opposed such legislation on the grounds that government should not be in the business of picking winners and losers in the energy sector.

Obama also announced that the Interior Department will hold the last scheduled offshore lease sale of the government’s current five-year drilling plan in June, offering 38 million acres (15 million hectares) for development in the central Gulf of Mexico.

In December, the department held its first offshore lease sale since the massive BP oil spill in April 2010. Companies successfully bid more than $337 million for rights to drill in the Gulf.

Analysts said those results were a sign that drilling is rebounding in the Gulf after the administration temporarily shut down deepwater exploration after the BP disaster.

Still, oil and gas industry backers have complained that the administration has hindered drilling through slow permitting and a raft of new rules implemented since the 2010 oil spill.

Source: http://us.rd.yahoo.com/dailynews/rss/science/*http%3A//news.yahoo.com/s/nm/20120126/pl_nm/us_obama_energy_natgas

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NEW YORK ? The nation’s natural gas supplies declined last week, the government said Thursday.

The Energy Department’s Energy Information Administration said in its weekly report that natural gas in storage shrank by 192 billion cubic feet to 3.098 trillion cubic feet for the week ended Jan. 20.

Analysts expected a drop of 171 billion to 175 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Although last week’s decline was larger than the five-year average draw of 173 billion cubic feet, the inventory level was still 21.4 percent above the five-year average of 2.551 trillion cubic feet, and 20.7 percent above last year’s level of 2.567 trillion cubic feet, according to the government data.

Mild winter weather has kept thermostats down and natural gas supplies high.

Natural gas futures fell 3 cents to $2.70 per 1,000 cubic feet in New York.

Source: http://us.rd.yahoo.com/dailynews/rss/energy/*http%3A//news.yahoo.com/s/ap/20120126/ap_on_bi_ge/us_natural_gas_storage

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