U.S. natgas futures near flat early; chilly forecast supports
NEW YORK, March 8 (Reuters) - U.S. natural gas futures were little changed in early trading Friday, with bullish inventory data and fairly chilly weather forecasts for next week partly offset by profit-taking ahead of the weekend and after strong gains earlier this week. Cold late-winter weather has helped push the front contract up nearly 13 percent in the last three weeks, turning the chart picture more supportive as prices broke through some key moving average and trendline resistance points. Traders also viewed Thursday's 146 billion cubic feet weekly inventory decline as bullish, noting it was the third straight week that the draw came in above market expectations. But while the near contract is up more than 3 percent this week following a 5 percent rise last week, many technical traders still need a front-month close above the 2013 high of $3.645 per million British thermal units to turn bullish. At 9:10 a.m. EST (1410 GMT), front-month gas futures on the New York Mercantile Exchange were down 0.3 cent at $3.579 per mmBtu, after trading in a narrow range between $3.565 and $3.599. The nearby contract hit a six-week high of $3.603 on Thursday after the inventory report. After a brief late-week warm-up, traders noted there was still some chilly weather in the extended forecast. The National Weather Service six- to 10-day and eight- to 14-day forecasts on Thursday continued to show below-normal temperatures for most of the eastern half of the nation. Gas prices have also drawn support from more utilities using gas for baseload power this year and from sizeable nuclear plant outages that have prompted more gas burn. Gas-fired units are typically used to offset shut nuclear generation. But some traders expect further upside to be difficult with winter winding down, storage still high and production flowing at or near a record peak. While the weekly draw came in well above the five-year average drop for that week of 107 bcf and sliced 39 bcf from the surplus versus the five-year average, total storage of 2.083 trillion cubic feet is still relatively high at 269 bcf, or 15 percent, above that benchmark. Traders were waiting for the next drilling rig report from Baker Hughes on Friday. The company's dry gas rig count has fallen in four of the last five weeks and is hovering just above the 13-1/2 year low hit in early November, but production has not slowed much, if at all, from the record high posted last year.
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