U.S. natgas futures near flat early, near-term cold supports

Fri Mar 1, 2013 9:38am EST
 
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NEW YORK, March 1 (Reuters) - U.S. natural gas futures were
trading near unchanged early on Friday, underpinned by chilly
weather though near-record high supplies and the moderating
extended outlook were limiting the upside.
    Cold forecasts have helped drive the front contract up more
than 10 percent over the last two weeks. 
    Traders also viewed Thursday's above-average weekly
inventory decline as supportive for prices, noting it was the
second straight week that the draw came in above expectations.
Most expect another strong pull in next week's report.
    But despite some near-term cold, traders noted the extended
outlook seemed to be moderating and few expect much upside in
prices with winter winding down, storage still high and
production flowing at or near a record peak.
    Prices should, however, draw some support from utilities
switching from coal to cheaper gas to generate power and from
healthy nuclear plant outages that have prompted more gas burn.
    Gas-fired units are typically used to offset any shut
nuclear generation.        
    At 9:20 a.m. EST (1420 GMT), front-month gas futures 
on the New York Mercantile Exchange were down 0.7 cent at $3.479
per million British thermal units, after trading in a narrow
range between $3.456 and $3.503.
    While the recent run-up in prices broke some key moving
average and trendline resistance points and turned the chart
picture more supportive, technical traders said Wednesday's weak
front-month close after climbing intraday to a five-week high of
$3.554 cast doubt about further upside.
    Most chart watchers would need a close at least above this
year's high of $3.645 to turn more positive on prices.
    MDA Weather Services noted that the six- to 10-day outlook
turned slightly warmer again from the central to eastern United
States, but the private forecaster still expects another shot of
cold air to hit the Midwest in the 11- to 15-day time frame.