U.S. natgas futures seesaw early, hover near $4/mmBtu

Mon Jun 3, 2013 9:37am EDT
 
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* Front month remains well below recent 21-month high
    * Weather forecasts mixed for early June
    * Nuclear power plant outages back above normal

    By Eileen Houlihan
    NEW YORK, June 3 (Reuters) - U.S. natural gas futures prices
seesawed on either side of unchanged territory early Monday,
with the front month contract hovering near the key $4 per
million British thermal unit level.
    With weather forecasts mixed for the next two weeks and
nuclear power plant outages only slightly above normal, most
traders said a bias remained to the downside after five straight
losses.
    As of 9:25 a.m. EDT (1325 GMT), front-month July natural gas
futures on the New York Mercantile Exchange were at
$3.987 per million British thermal units, up 0.3 cent, after
trading between $3.951 and $4.03.
    The nearby contract fell nearly 6 percent in last week's
holiday-shortened week and was down more than 8 percent in May.
    It hit a one-month low of $3.883 on May 9 after climbing to
a 21-month high of $4.444 on May 1.
    The latest National Weather Service six- to 10-day forecast
issued on Sunday called for below-normal temperatures in the
eastern two-thirds of the nation and above-normal readings in
the western third.
    Nuclear plant outages totaled 12,900 megawatts, or 13
percent of U.S. capacity, up from 12,400 MW out on Friday and a
five-year average outage rate of 12,200 MW, but down from 18,700
MW out a year ago. 
    Baker Hughes data on Friday showed the gas-directed
rig count was unchanged for a second straight week at 354. The
count posted an 18-year low of 350 three weeks ago.
 

    Data last week from the U.S. Energy Information
Administration showed inventories rose the prior week by 88
billion cubic feet to 2.141 trillion cubic feet. Stocks are
nearly 24 percent below year-ago levels and nearly 4 percent
below the five-year average. 

    Early estimates for this week's EIA gas storage report range
from 78 bcf to 95 bcf versus a year-ago gain of 63 bcf and a
five-year average build of 92 bcf for that week.