U.S. natgas futures edge higher, hit 3-month spot chart high
* Front month at highest mark since early December * Nuclear outages still running above normal * Mixed weather outlooks, some mild temperatures on tap * Coming Up: EIA natgas storage data on Thursday By Eileen Houlihan NEW YORK, March 13 (Reuters) - U.S. natural gas futures edged higher early on Wednesday, climbing to a fresh three-month spot chart high amid continued technical buying and some cold weather expected to return to consuming regions of the nation late this week. With forecasts for next week mixed, calling for some above-normal and below-normal temperatures, and inventories still well above normal, some traders remained cautious of more upside. But others said the chart picture remained supportive, with the nearby contract breaking through some key resistance levels on its 18 percent run up from the five-week low of $3.125 per million British thermal units hit in mid-February. As of 9:22 a.m. EDT (1322 GMT), front-month April natural gas futures on the New York Mercantile Exchange were at $3.679 per million British thermal units, up 3.4 cents, or about 1 percent. The nearby contract rose as high as $3.686 in electronic trade, its highest price since early December, according to Reuters data. Forecaster MDA Weather Services called for warmth to build in the western United States in its one to five-day outlook, but some below-normal temperatures were seen lingering in the East. The latest National Weather Service six to 10-day forecast issued on Tuesday also called for below-normal temperatures in most of the West and normal or above-normal for much of the East. Nuclear outages totaled about 17,400 megawatts, or 17 percent of U.S. capacity, up from 16,500 MW out on Tuesday and a five-year average outage rate of about 15,900 MW, but down from 19,600 MW out a year ago. ANOTHER ABOVE-AVERAGE STORAGE DRAW U.S. Energy Information Administration data last week showed domestic gas inventories fell the prior week by 146 billion cubic feet to 2.083 trillion cubic feet. Most traders viewed the decline as supportive, noting it was the third straight week that the draw came in above expectations. A Reuters poll showed traders and analysts had forecast a 134 bcf drop. The draw was also well above the 92 bcf pull seen during the same week last year and the five-year average drop of 107 bcf for that week. Storage is now 361 bcf, or 15 percent, below last year's record highs for this time of year, but it is also 269 bcf, or 15 percent, above the five-year average level. Early withdrawal estimates for Thursday's EIA inventory report range from 115 bcf to 147 bcf, well above the 66 bcf pulled from storage during the same week in 2012 and the five-year average decline of 74 bcf for that week. A string of strong weekly withdrawals has prompted analysts to sharply lower estimates for end-winter storage, with some expecting inventories to drop to as low as 1.8 tcf, or about 4 percent above average. A Reuters poll in mid-January showed most analysts had expected stocks to finish the heating season at about 2 tcf. So far this winter, nearly 500 bcf more gas has been pulled from storage than last year. RIGS DECLINE; OUTPUT SLOWING LITTLE Baker Hughes data last week showed the gas-directed drilling rig count fell 13 to a nearly 14-year low of 407. It was the fifth drop in six weeks, but production has not slowed much, if at all, from the record high posted last year. While the EIA on Tuesday lowered its growth forecast for 2013, it still expects marketed gas production to hit a record high for the third straight year.
© Thomson Reuters 2016 All rights reserved.