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Natural gas tumbles after supply report

NEW YORK (AP) -- Natural gas prices tumbled today after a government report showed that even after a frigid two-week winter blast, U.S. stockpiles are still well above average for this time of year.

Since March, natural gas held in underground caverns has remained at the high end of the five-year average. That's because some of the biggest energy consumers, industrial plants and manufacturers, have been in a recession-fueled funk.

Even as people turn up the heat at home to battle the elements and utilities use more natural gas because prices have fallen so far, it hasn't been enough to offset weak industrial demand.

That's been a big break for consumers who have had a relatively cheap winter to date. Natural gas futures remain about where they were to begin the year.

The Energy Information Administration said that the country used 266 billion cubic feet of natural gas last week, more than the consensus estimate, but short of an all-time record. There's still 2.85 trillion cubic feet in underground storage.

Natural gas prices, which had increased late Wednesday in anticipation of the report, plunged shortly after it was released. The futures contract for February delivery gave up 17 cents, nearly 3 percent, to $5.563 per 1,000 cubic feet on the New York Mercantile Exchange.

Energy analyst Jim Ritterbusch said there probably won't be as large of a drop in natural gas supplies for the rest of the year. But that doesn't mean heating prices are headed downward.

"There's still a lot of winter left," Ritterbusch said. "Prices could still go up if we see larger than normal draws in natural gas."

Meanwhile, retail gas prices ticked higher, adding less than a penny overnight to a new national average of $2.758 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 16 cents more expensive than last month and 96.6 cents more expensive than a year ago.