UPDATE 3-Storm worry props up U.S. natgas futures ahead of weekend
* Tropical Storm Karen not expected to become hurricane
* Mild weather next two weeks expected to reduce demand
By Joe Silha
NEW YORK, Oct 4 (Reuters) - U.S. natural gas futures ended slightly higher on Friday, but trade was choppy as short-covering amid concerns about a storm in the Gulf of Mexico was partly offset by bearish weather forecasts and ample supplies.
Tropical Storm Karen, which was not expected to become a hurricane before reaching land somewhere between Louisiana and the Florida Panhandle over the weekend, has prompted producers to shut nearly 40 percent, or about 1.7 billion cubic feet per day, of offshore natural gas output, according to government data.
"We've got two factors in opposition. We had a big storage build yesterday that was bearish, but we also have a storm in the Gulf that's shutting in some production," said Steve Mosley at The SMC Report in Arkansas.
But most traders seemed to shrug off news of the cuts, noting volumes were relatively small and demand typically slowed during autumn as temperatures moderate. In addition, they noted that tropical storm winds were likely not strong enough to do serious damage to offshore pipelines and platforms.
Front-month gas futures on the New York Mercantile Exchange ended up 0.7 cent at $3.506 per million British thermal units, after trading in a narrow range between $3.482 and $3.535.
The front contract, which posted a five-week low of $3.402 last week and lost 2.7 percent as temperatures turned milder and reduced demand, finished the week down 2.3 percent. The combined drop of 4.9 percent since Sept. 20 was the biggest two-week loss in nearly two months. Continued...