Natural gas prices at 2-year low

The futures price of natural gas contracts fell to a two-year lowThursday, pointing to lower winterbills for Canadians who heat with gas.

The October contract closed at$4.89 US per million British Thermal Units in afternoon trading, down 56 cents US from Wednesday's close.

Thefront-month futures contracthasn't settled below $5 US since September 2004. Just a month ago, gas prices were above $8 US and last year at this time, prices were nudging $12 US.

Thursday's decline was,in part, a result ofthe release of U.S. Energy Department figuresthat showed a rise in gas supplies of 108 billion cubic feet in the past week. That was a bigger build than analysts had expected.

There are now more than three trillion cubic feet of gas in U.S. storage facilities. That's 12.4 per cent above thefive-year average for this time of year.

"It looks much better than last year for natural gas consumers," said Mark Stultz, a spokesman for the Natural Gas Supply Association.

Natural gas supplies were already strong because last winter was relatively warm and this year's hurricane seasonhas proven to be a non-issue so far, at least as far as production facilities in theGulf of Mexico are concerned.