U.S. natgas futures hit 3-month spot high ahead of EIA data
* Front month at highest mark since early December * Nuclear outages still running above normal * Mixed weather outlooks, some cold weather back on tap * Coming Up: EIA natgas storage data on Thursday By Eileen Houlihan NEW YORK, March 14 (Reuters) - U.S. natural gas futures rose to a more than three-month spot chart high early Thursday, lifted by continued technical buying, cold weather set to return to consuming regions late this week and next and expectations for another big weekly storage draw. Most traders and analysts expect weekly storage data from the U.S. Energy Information Administration to show a drop of about 134 billion cubic feet when it is released at 10:30 a.m. EDT (1430 GMT), a Reuters poll showed. Storage fell an adjusted 66 bcf during the same week in 2012 and the five-year average decline for that week is 74 bcf. Many agree the chart picture remains supportive, after the nearby contract broke through some key resistance levels on its 18-percent run up from a five-week low of $3.125 per million British thermal units hit in mid-February. As of 9:18 a.m. EDT (1318 GMT), front-month April natural gas futures on the New York Mercantile Exchange were at $3.713 per million British thermal units, up 3.3 cents, or about 1 percent. The front-month rose as high as $3.715 in electronic trade, the highest mark for a spot contract 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 colder weather in northern regions, including the Northeast. The latest National Weather Service six to 10-day forecast issued on Wednesday called for below-normal temperatures for much of the nation, with above-normal readings in the Southeast stretching into Texas. Nuclear outages totaled about 17,400 megawatts, or 17 percent of U.S. capacity, flat to Wednesday's levels, up from a five-year average outage rate of 16,300 MW, but down from 19,600 MW out a year ago. ANOTHER ABOVE-AVERAGE STORAGE DRAW Last week's EIA data showed domestic gas inventories fell the prior week by 146 bcf 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. 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 Traders were waiting for the next Baker Hughes gas drilling rig report to be released on Friday. Data last week showed the gas-directed 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.
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