U.S. natgas futures rise early on more cold weather
* Front month remains well above recent 3-month low * Forecasters expecting some cold weather could linger * Nuclear outages running above normal levels * Coming Up: EIA natgas storage data Thursday By Eileen Houlihan NEW YORK, Feb 6 (Reuters) - U.S. natural gas futures rose for a third straight day early Wednesday, lifted by lingering cold weather in the eastern half of the country that has boosted heating demand. Thomson Reuters Natural Gas Analytics data showed heating degree days turned quite a bit colder overnight in most areas, the greatest increase in the Northeast where demand went up by more than forty degree days compared to late computer runs on Tuesday. Degree days are a measure of departure in the mean daily temperature from 65 degrees Fahrenheit (18 degrees Celsius) and are used to estimate demand to heat or cool homes and businesses. As of 9:25 a.m. EST (1425 GMT), front-month March natural gas futures on the New York Mercantile Exchange were at $3.442 per million British thermal units, up 4.3 cents, or more than 1 percent. The front month contract hit a 6-1/2 week high of $3.645 two weeks ago after hitting a more than three-month low of $3.05 in early January. The latest National Weather Service six- to 10-day forecast issued on Tuesday trimmed the above-normal reading area to just the eastern third of the nation, with below-normal temperatures across the West and some normal readings in the mid-continent. Nuclear outages totaled 8,600 megawatts, or 9 percent of U.S. capacity, up from 8,500 MW out on Tuesday and a five-year average outage rate of about 8,200 MW, but below the year-ago outages of about 11,000 MW. STORAGE DRAW FALLS SHORT OF EXPECTATIONS Last week's storage report from the U.S. Energy Information Administration showed domestic gas inventories fell the prior week by 194 billion cubic feet, below industry expectations for a 206-bcf draw. Most traders viewed the decline as bearish, noting it was below market expectations for the first time in five weeks. But others noted the draw was above the year-ago drop of 149 bcf and the five-year average draw of 178 bcf. Storage now stands 202 bcf, or about 7 percent, below last year's record high levels, but 304 bcf, or more than 12 percent, above the five year-average. Withdrawal estimates for Thursday's inventory report so far range from 125 bcf to 158 bcf, well above the 94 bcf pulled from storage during the same week in 2012, but in line with the five-year average decline for that week of 165 bcf. If drawdowns for the rest of winter match the five-year average, inventories will end March at 2.032 tcf, about 18 percent above normal but 18 percent below last year, when stocks finished a very mild heating season at a record-high 2.48 tcf. GAS RIG COUNT FALLS, OUTPUT STILL NEAR RECORD Baker Hughes data last week showed the gas-directed drilling rig count fell for the third time in four weeks, dropping by six to 428. While the gas rig count is hovering not far above the 13-1/2 year low of 413 hit about three months ago, production has shown no significant sign of slowing. EIA estimates that marketed gas output in 2013 will hit a record high for the third straight year.
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