UPDATE 1-U.S. natgas futures rise 2 pct to 17-month spot high
* Front month hits highest mark since October 2011 * Nuclear outages still running above normal * Cold weather remains on tap in long-term outlooks By Eileen Houlihan NEW YORK, March 18 (Reuters) - U.S. natural gas futures rose about 2 percent early on Monday, after surging to their highest mark in 17 months. Lingering cold weather in consuming regions of the United States, a string of supportive weekly storage withdrawals, above-normal nuclear power plant outages and technical buying have combined to lift nearby gas futures more than 26 percent in the past month. The contract broke through several key resistance levels on its run up from a five-week low of $3.125 per million British thermal units hit in mid-February. But some traders caution that the impending end of winter could provide resistance to higher prices. As of 9:14 a.m. EDT (1314 GMT), front-month April natural gas futures on the New York Mercantile Exchange were at $3.94 per mmBtu, up 6.8 cents, or nearly 2 percent. The front-month rose as high as $3.965 in electronic trade, the highest mark for a spot contract since October 2011, according to Reuters data. Forecaster MDA Weather Services called for below-normal or much-below-normal temperatures across most of the country in its one to five-day outlook, with normal or above-normal readings only in some southern states. The latest National Weather Service six to 10-day forecast issued on Sunday called for below-normal temperatures for a little more than the eastern half of the country, with above-normal readings in the West. Nuclear outages totaled 20,500 megawatts, or 20 percent of U.S. capacity, up from 18,300 MW out on Friday and a five-year average outage rate of about 16,400 MW, but down from 21,100 MW out a year ago. ANOTHER ABOVE-AVERAGE STORAGE DRAW U.S. Energy Information Administration data last week showed storage fell 145 billion cubic feet the prior week, above Reuters poll expectations for a 134 bcf draw, the year-ago drop of 66 bcf, and the five-year average decline for that week of 74 bcf. It was the fourth straight larger-than-expected drawdown from inventories. The data showed domestic gas inventories are now at 1.938 trillion cubic feet, nearly 19 percent below last year's record high levels for this time of year, but about 11 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 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. Early withdrawal estimates for this week's EIA storage report range from 48 bcf to 73 bcf, versus a flat year-ago week and a five-year average withdrawal of 26 bcf for that week. Baker Hughes data last week showed the gas-directed drilling rig count rose by 24, the largest number in over three years, lifted from the prior week's 14-year low to 431. But while the EIA last week 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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