U.S. natgas futures higher ahead of late-season storage draw

Thu Apr 11, 2013 9:21am EDT
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* Front month below Monday's 20-month spot chart high
    * Traders expect weekly drawdown from inventories
    * Some cold weather back on tap in northern states
    * Coming Up: EIA natgas storage data 10:30 a.m. EDT/1430 GMT

    By Eileen Houlihan
    NEW YORK, April 11 (Reuters) - U.S. natural gas futures
edged higher early on Thursday, lifted  by expectations for
another late-season inventory withdrawal later in the day and
some below-normal temperatures back on tap for northern states.
    With milder, spring-like weather in consuming regions of the
nation earlier week, traders had expected more upside to be
    But with the cold returning to the Midwest and plenty of
spring power plant outages, demand for gas-fired generation
remained firm.
     Most traders and analysts expect weekly data from the U.S.
Energy Information Administration to show a draw of about 21
billion cubic feet when it is released at 10:30 a.m. EDT (1430
GMT), a Reuters poll showed. 
    Stocks gained 11 bcf during the same week last year and on
average over the past five years have risen 15 bcf for that
    Gas futures are up about 31 percent since mid-February,
lifted by cold late-winter weather that put a huge dent in
inventories, above-average nuclear power plant outages and
stronger price expectations.
    As of 9:06 a.m. EDT (1306 GMT), front-month May natural gas
futures on the New York Mercantile Exchange were at
$4.092 per million British thermal units, up 0.7 cent, or less
than 1 percent.
    The contract rose to $4.18 on Monday, the highest mark for a
nearby contact since August 2011.
    Forecaster MDA Weather Services called for below or
much-below-normal temperatures across northern-tier states in
its one to five-day outlook, with above-normal temperatures in
much of the South.
    The latest National Weather Service six- to 10-day forecast
issued on Wednesday called for below-normal readings in the
mid-Continent and above-normal readings along the East Coast and
in the Southwest.
    Nuclear outages totaled 21,900 megawatts, or 22 percent of
capacity, down from 22,100 MW out on Wednesday, 25,600 MW out a
year ago and a five-year average outage rate of 23,500 MW.
    Traders said a number of coal-fired units also remained down
for spring maintenance. 
    For the latest table on power plant outages by region click
on the link 
    Last week's EIA gas storage report showed domestic
inventories fell in the prior week by 94 bcf, above Reuters poll
estimates for a 91 bcf draw. 
    It was the sixth time in seven weeks that the weekly
withdrawal exceeded expectations.
    Domestic gas inventories of 1.687 trillion cubic feet are
nearly 32 percent below last year's record high and more than 2
percent below the five-year average.
    Inventories fell below the five-year average for the first
time since September 2011, a supportive sign, particularly with
another draw expected this week.

    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.
    Baker Hughes data last week showed the gas-directed
drilling rig count fell 14 to a 14-year low of 375.