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Natural gas jumps 4 percent as power comes back after Hurricane Irene; oil falls below $89
NEW YORK (AP) ' The price of natural gas, a major energy source for power plants, jumped nearly 4 percent Wednesday as power started to come back in the U.S. East following widespread outages caused by Hurricane Irene.
In other energy trading, benchmark West Texas Intermediate crude fell 9 cents to finish at $88.81 per barrel in New York, and Brent crude, used to price international varieties of oil, rose 83 cents to end at $114.85 in London.
Utilities in the U.S. are making progress in reconnecting homes and businesses that lost power over the weekend. More than three-quarters of the 9.4 million outages were restored during the past few days, and almost all the power should be back by next week. The recovery will boost energy demand along the East Coast, increasing the output from natural gas-fired generators.
Natural gas rose 14.5 cents, or 3.7 percent, to finish at $4.054 per 1,000 cubic feet.
Gas also got a boost Wednesday from the shutdown of a major pipeline in the Gulf of Mexico that has operating problems. The 255-mile (410-kilometer) long Destin Pipeline transports gas from offshore wells in the Gulf to processing facilities in Mississippi that send gas on to major interstate pipelines.
BP, which is the majority owner of Destin, said that the pipeline can transport up to 1.2 billion cubic feet of natural gas per day, about one-fifth the amount that Americans consume. The company didn't say how long the pipeline would be offline.
Losing the Destin Pipeline should not make a big impact on supplies, said Ron Denhardt, vice president of natural gas services at Strategic Energy & Economic Research. "But it's still going to support prices for a little while," he said.
In other energy trading on the New York Mercantile Exchange, heating oil was up less than a penny to finish at $3.084 per gallon and gasoline futures increased 3.48 cents to end the day at $2.8763 per gallon. __'
Chris Kahn can be reached at http://twitter.com/ChrisKahnAP