Natural gas prices fall to 10-year low

In this 2007 file photo, natural gas wellheads and other production facilities are shown around the rural community of Pavillion, Wyo. AP Photo/Casper Star-Tribune/Dustin Bleizeffer

(CBS/AP) NEW YORK — The price of natural gas has dropped below $2 for the first time in more than a decade.

A mild winter and a production boom have left the U.S. with more natural gas than Americans can consume. The glut has pushed down the price of gas 59 percent since it peaked at $4.85 per 1,000 cubic feet last summer. And prices have been tumbling all year.

On Wednesday afternoon, they passed a milestone. Gas fell to $1.999 per 1,000 cubic feet. The last time it fell below $2 was Jan. 28, 2002, when it hit $1.91.

Cheaper gas has already lowered heating bills this winter, and air conditioning costs are expected to fall this summer since many utilities burn natural gas for electricity. Major American manufacturers including chemical companies, fertilizer plants, aluminum and steelmakers also should benefit as energy costs tumble.

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"If you're a consumer, this is great news," independent petroleum analyst Stephen Schork said. "This could spark a real rebirth of American manufacturing."

Supplies of gas are high because improved drilling techniques have boosted production, and because an unusually warm winter meant people used less gas for heating.

Meanwhile, oil prices rose on positive signs for the economy and energy demand. Prices rose with a rebound in the stock market. Aluminum maker Alcoa also surprised Wall Street late Tuesday with a first-quarter profit instead of a loss, thanks to stronger sales to carmakers and other manufacturers. Alcoa is the first major company to announce earnings for the quarter.

Benchmark U.S. crude rose by $1.28 to $102.31 per barrel on Wednesday.