U.S. natgas futures jump 3 pct early, storage draw supports
* Front month remains below last week's 19-month spot high * Above-normal temperatures on tap for South * Below-normal readings seen for some northern states * Coming Up: Baker Hughes gas drilling rig data Friday By Eileen Houlihan NEW YORK, April 5 (Reuters) - U.S. natural gas futures jumped about 3 percent early on Friday, lifted in follow through to Thursday's supportive inventory draw and ahead of warm weather expected in the South and cool weather on tap in some northern states. "You have colder temperatures in the North and warmer-than-normal temperatures in Texas and the South, that should boost demand," said Phil Flynn, analyst at Price Futures Group in Chicago. "Yesterday's storage data, dropping below the five-year average, was also bullish. And with the rig count at a 14-year low, that could mean that we have substantially less in storage heading into next winter," he added. Government storage data on Thursday showed inventories fell below the five-year average for the first time since September 2011, a supportive sign particularly with another draw expected next week. In addition, traders said a Goldman Sachs report upping its 2013 natural gas price forecast added momentum to the upside. Cold late-winter weather and above-average nuclear power plant outages have helped put a huge dent in inventories and drive futures prices up nearly 30 percent since mid-February. But most traders had expected milder spring temperatures to limit any additional upside, particularly with nuclear outages slipping back below normal. As of 9:26 a.m. EDT (1326 GMT), front-month May natural gas futures on the New York Mercantile Exchange were at $4.059 per million British thermal units, up 11.2 cents, or nearly 3 percent, but still below last week's $4.121 high, the highest mark for a nearby contact since September 2011. The latest National Weather Service six-to-10-day forecast, issued on Thursday, called for above-normal readings along the East Coast and West Coast and a swath of below-normal readings in the mid-continent. Nuclear outages totaled 20,700 megawatts, or 21 percent of capacity, down from 21,200 MW out on Thursday, 21,900 MW out a year ago, and a five-year average of 22,500 MW. INVENTORY DRAW ABOVE EXPECTATIONS AGAIN Thursday's gas storage report from the U.S. Energy Information Administration showed domestic gas inventories fell last week by 94 billion cubic feet to 1.687 trillion cubic feet. Most traders viewed the decline as supportive for prices, noting stocks usually build slightly that week and the draw came in above Reuters poll estimates for a 91-bcf draw. It was the sixth time in seven weeks that the weekly withdrawal was above expectations. Domestic gas inventories are now at 1.687 trillion cubic feet, nearly 32 percent below last year's record high and more than 2 percent below the five-year average. Early withdrawal estimates for next week's storage report range from 20 bcf to 36 bcf versus an 11-bcf build during the same week last year and a five-year average rise for that week of 15 bcf. Stocks look likely to end the heating season near 1.66 tcf, about 33 percent below last winter's record high finish of 2.48 tcf and 4 percent below average. Traders were waiting for the next Baker Hughes gas drilling rig report, due later Friday. Data last week showed the gas-directed drilling rig count fell by 29 to a 14-year low of 389.
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