U.S. natgas futures edge higher for 5th day, below 17-mth high
* Front month below Monday's highest level since Oct. 2011 * Nuclear outages still running above normal * Cold weather remains on tap in long-term outlooks By Eileen Houlihan NEW YORK, March 19 (Reuters) - U.S. natural gas futures edged higher early on Tuesday, extending gains for a fifth straight session but remaining just under Monday's 17-month spot chart high. Lingering cold weather in consuming regions of the nation, a string of supportive weekly storage withdrawals and above-normal nuclear power plant outages have combined to lift nearby gas futures up about 25 percent in just over a 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, and was accompanied by steady gains in open interest, a bullish sign indicating that new buying and not short covering has been fueling the upside. Futures-only open interest hit a record high of 1,316,945 contracts on Friday, eclipsing the previous high of 1,308,114 from April 2012. But some traders caution that the impending end of winter could provide resistance to higher prices. As of 9:31 a.m. EDT (1331 GMT), front-month April natural gas futures on the New York Mercantile Exchange were at $3.904 per mmBtu, up 2.2 cents, or less than 1 percent. The front-month rose to $3.965 on Monday, the highest mark for a spot contract since October 2011, according to Reuters data. Forecaster MDA Weather Services called for widespread cold across most of the country in its one to five-day outlook. The latest National Weather Service six to 10-day forecast issued on Monday called for below or much-below-normal temperatures for a little more than the eastern half of the nation, with normal readings in the West. Nuclear outages totaled 21,000 megawatts, or 21 percent of U.S. capacity, up from 20,500 MW out on Monday and a five-year average outage rate of about 17,200 MW, but down from 21,700 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, more than 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. The 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 62 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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