U.S. natgas futures edge higher before EIA releases storage data
* Front month still above Wednesday's 3-month spot low * Long-term outlooks call for mostly mild weather * Coming up: EIA natgas storage data Friday By Eileen Houlihan NEW YORK, Jan 4 (Reuters) - U.S. natural gas futures edged higher early on Friday, as expectations for a large drawdown from winter inventories boosted prices for the first time in four sessions. Prices remained above Wednesday's three-month spot chart low, but most traders expect the upside to be limited, with long-term weather outlooks still calling for milder weather for consuming regions in the eastern half of the United States. Most traders and analysts expect weekly data from the U.S. Energy Information Administration to show a draw of about 127 billion cubic feet when it is released at 10:30 a.m. EST (1530 GMT), a Reuters poll showed. Stocks fell 77 bcf during the same year-ago week, and have dropped about 111 bcf on average that week over the past five years. The EIA report was delayed by one day this week to Friday due to the New Year's Day holiday on Tuesday. As of 9:04 a.m. EST (1404 GMT), front-month February gas futures on the New York Mercantile Exchange were at $3.244 per million British thermal units, up 4.6 cents, or more than 1 percent. The front-month contract, however, fell to $3.05 on Wednesday, a contract low and the lowest mark for a spot contract since late September. The latest National Weather Service six-to-10-day forecast issued on Thursday again called for above-normal temperatures for the eastern half of the United States, with below-normal readings for most of the western half. Nuclear outages totaled just 7,500 megawatts, or 7 percent, of U.S. capacity, even with outages on Thursday, but up from 4,300 MW out a year ago and a five-year average outage rate of about 5,000 MW. WINTER STORAGE STILL BLOATED Last week's EIA gas storage report showed total domestic inventories fell 72 bcf to 3.652 trillion cubic feet, below market expectations for a 76 bcf draw. Inventories started the heating season in early November at an all-time high of 3.929 tcf and are still at record highs for this time of year, hovering at more than 2 percent above last year and 13 percent above the five-year average. RIGS GAIN, OUTPUT STILL NEAR RECORD Baker Hughes data last week showed the gas-directed rig count rose by two to 431, its second straight weekly gain. But drilling for natural gas has mostly declined for more than a year, with gas rigs down 54 percent since peaking at 936 in October 2011. The gas rig count is hovering just above a 13-1/2-year low of 413 hit seven weeks ago, but so far production has not shown any significant sign of slowing. The EIA expects gas output in 2013 to rise to a record high of 69.59 bcf per day, the third straight annual record.
© Thomson Reuters 2017 All rights reserved.