U.S. natgas futures hover near $4/mmBtu on lingering cold
* Front month just under last week's 18-month high * Nuclear outages still running above normal * Cold weather remains on tap in long-term forecasts By Eileen Houlihan NEW YORK, March 25 (Reuters) - U.S. natural gas futures rose 1 percent early on Monday to just under last week's 18-month spot chart high near $4 per million British thermal units as cold weather lingered in consuming regions of the nation. Cold late-winter weather helped drive a string of supportive storage withdrawals, pushing gas futures up about 25 percent in the past five weeks. Above-normal nuclear power plant outages have also increased demand for gas-fired replacement power and underpinned price gains. The nearby contract broke through several key resistance levels on its run up from a five-week low of $3.125 hit in mid-February, and was accompanied by steady gains in open interest, a bullish sign indicating that new buying and not short covering was fueling the upside. But with winter weather expected to end soon and production still flowing at or near an all-time peak, most traders see the upside as limited. As of 9:28 a.m. EDT (1328 GMT), front-month April natural gas futures on the New York Mercantile Exchange were at $3.979 per mmBtu, up 5.2 cents, or just more than 1 percent, after rising to $4.025 last week, the highest mark for a spot contract since September 2011. Forecaster MDA Weather Services called for below- or much-below-normal temperatures for about the eastern two-thirds of the country in its one-to-five-day outlook. The National Weather Service's latest six-to-10-day forecast issued on Sunday called for below-normal readings for a little more than the eastern half of the nation and above-normal readings in the West. Nuclear outages totaled 22,500 megawatts, or 22 percent of U.S. capacity, up from 21,400 MW out on Friday, 20,900 MW out a year ago and a five-year average outage rate of about 18,300 MW. INVENTORY DRAW FALLS SHORT OF EXPECTATIONS Last week's data from the U.S. Energy Information Administration showed total domestic gas inventories fell the prior week by 62 billion cubic feet, below Reuters poll estimates for a 70 bcf draw. It was the first time in five weeks that the weekly draw fell short of expectations. Domestic gas inventories are now at 1.876 trillion cubic feet, more than 21 percent below last year's record high for this time of year, but about 10 percent above the five-year average. Stocks seem on track to end the heating season below 1.8 tcf, or just 3 percent above average. A Reuters poll in mid-January showed most analysts had expected stocks to finish the winter at about 2 tcf. Early withdrawal estimates for this week's inventory report range from 59 bcf to 94 bcf versus a 45-bcf build during the same week last year and a five-year average increase for that week of 6 bcf. Baker Hughes data on Friday showed the gas-directed drilling rig count fell by 13 to 418, hovering just above the recent 14-year low of 407 posted three weeks ago. While the EIA recently 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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