UPDATE 3-Front U.S. natgas futures end up, 1st gain in 6 sessions
* Chart buying underpins gains after last week's slide * Milder weather forecasts likely to slow demand By Joe Silha NEW YORK, June 3 (Reuters) - Front-month U.S. natural gas futures ended higher on Monday for the first time in six sessions, on light technical buying and bargain hunting after last week's slide and despite milder weather forecasts for the next two weeks that should slow demand. Chart traders said the market was due for a bounce after dropping 6 percent last week, its biggest weekly stumble since the middle of December. "It wasn't much of a bounce. The market seems stalled after the big slide last week," said Patrick Saunders at Albans Energy, an independent consulting firm in Houston. Front-month gas futures on the New York Mercantile Exchange ended up 0.7 cent at $3.991 per million British thermal units after trading between $3.951 and $4.04. Most deferred months also settled with slight gains. The front contract lost 8.3 percent in May, its largest monthly decline since last August. Technical support for the front contract was seen first in the $3.95 area, with resistance at about $4.12-4.13. Private forecaster Commodity Weather Group said it expected seasonal or below-seasonal temperatures to continue for the eastern half of the nation for the next two weeks, with heat mostly centered in the interior West and Southwest. COMFORTABLE STORAGE, PRODUCTION Baker Hughes data on Friday showed the gas-directed rig count was unchanged for a second straight week at 354. The count is hovering just above an 18-year low of 350 posted three weeks ago. Despite the steep decline in dry gas drilling over the last year and a half, production has not slowed much, if at all. U.S. Energy Information Administration data on Friday showed gross natural gas production in March fell for the third time in four months, but output is running more than 1 percent above last year and the agency still expects production in 2013 to post a record high for a third straight year. While traders said strong heat last week may have slowed storage injections, they said the impact was partly offset as earlier cool weather and the U.S. Memorial Day holiday on May 27 likely slowed some demand. Early injection estimates for Thursday's EIA report range from 80 to 95 bcf versus a 63 bcf build during the same week last year and a five-year average gain for that week of 92 bcf.
© Thomson Reuters 2017 All rights reserved.