Dow Closing ShopNatural Gas Reaches 15-Month Low as Dow Chemical to Shut Plants
By Reg Curren
Dec. 8 (Bloomberg) -- Natural gas futures in New York fellto a 15-month low after Dow Chemical Co., the largest U.S.chemical maker, said it plans to shut plants and cut jobsbecause of declining sales.
“Dow is a big consumer of gas,” said Phil Flynn, seniortrader at Alaron Trading Corp. in Chicago. “It seems naturalgas is focusing on the fact industrial demand is so weak.”
Natural gas was the only energy futures market to declinetoday. Crude oil surged on a plan from President-elect BarackObama to start the biggest U.S. public works program in about 50years to revive the economy.
Natural gas for January delivery fell 17.6 cents, or 3.1percent, to settle at $5.566 per million British thermal unitsat 3:27 p.m. on the New York Mercantile Exchange. The settlementis the lowest since futures prices reached $5.501 on Sept. 7,2007. Gas futures dropped 12 percent last week and are down 26percent this year.
Dow said today it will close 20 plants and temporarily idle180 others. Dow uses gas and petroleum to power plants and asraw materials for plastics and chemicals.
The chemical industry accounted for 6.2 percent of totalU.S. energy consumption in 2007, according to the AmericanChemistry Council. Gas represents 33 percent of the industry’sdemand for fuel and feedstocks, according to the association’sWeb site.
“Whenever you have industrials closing down, that’s alwaysgoing to put natural gas behind the eight ball,” said MichaelRose, a director of trading at Angus Jackson Inc. in FortLauderdale, Florida. “Industrials are a big user of naturalgas.”