U.S. natgas futures edge lower for fourth day on milder weather
* Front month well below last week's 19-month spot high * Above-normal temperatures on tap for eastern U.S. * Nuclear outages remain slightly above normal * Coming Up: EIA natgas storage data Thursday By Eileen Houlihan NEW YORK, April 3 (Reuters) - U.S. natural gas futures edged lower for a fourth straight session on Wednesday, as milder weather on tap for consuming regions of the nation late this week and next was expected to curb heating demand. Late-winter cold put a huge dent in inventories and drove gas prices up nearly 30 percent since mid-February, but with winter-like weather expected to wind down soon, most traders expect more upside to be limited. But some traders said above-normal nuclear power plant outages could continue to support near-term demand for gas-fired generation. As of 9:07 a.m. EDT (1307 GMT), front-month May natural gas futures on the New York Mercantile Exchange were at $3.937 per million British thermal units, down 3.2 cents, or less than 1 percent, after rising to $4.121 last week, the highest level for a nearby contact since September 2011. Despite some lingering cold this week in consuming regions in the Northeast and Midwest, the latest National Weather Service six to 10-day forecast issued on Tuesday again called for above-normal readings for about the eastern half of the nation, with some below-normal readings only expected in parts of the Southwest. Nuclear outages totaled 22,400 megawatts, or 22 percent of capacity, down from 23,400 MW out on Tuesday and 22,600 MW out a year ago, but up from a five-year average outage rate of 21,600 MW. INVENTORY DRAW WELL ABOVE EXPECTATIONS Last week's gas storage report from the U.S. Energy Information Administration showed domestic gas inventories fell the prior week by 95 billion cubic feet, above Reuters poll estimates for an 87 bcf draw. It was the fifth time in six weeks that the weekly withdrawal was above expectations. Domestic gas inventories are now at 1.781 trillion cubic feet, nearly 27 percent below last year's record high, but still nearly 4 percent above the five-year average. Early estimates for Thursday's EIA gas storage report range from 65 bcf to 108 bcf, with most in the high-80s bcf. Stocks rose an adjusted 43 bcf during the same week last year and on average over the past five years have gained 4 bcf that week. Stocks began the winter at a record 3.929 tcf, but about 2.15 tcf of gas has been pulled from storage so far this heating season, or 45 percent more than last year at this time. Storage will likely end the heating season near the 1.73 tcf average, or 30 percent below last winter's record-high finish of 2.48 tcf. A Reuters poll in mid-January showed most analysts expected stocks to finish the winter at about 2 tcf. EIA data released Friday showed that gross natural gas production in January fell nearly 1 percent from December levels, the second straight monthly decline. Output also dropped below year-ago levels for the first time in years, but it is still unclear whether recent monthly declines were due to well freeze-offs from the cold or producers' curbing dry gas flows because prices were not that attractive. Baker Hughes data last week showed the gas-directed drilling rig count fell by 29 to a 14-year low of 389.
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