U.S. natgas futures rise, remain under Monday's 20-month high

Tue Apr 16, 2013 9:35am EDT
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* Front month hit highest mark since July 2011 on Monday
    * Below-normal temperatures remain on tap for consuming
    * Nuclear plant outages still above five-year average

    By Eileen Houlihan
    NEW YORK, April 16 (Reuters) - U.S. natural gas futures
edged higher early on Tuesday, lifted again by forecasts for
continued below-normal temperatures in consuming regions of the
nation, but remaining under Monday's highest mark in more than
20 months.
    A tightening supply picture and a slew of nuclear power
plant outages also helped boost prices.
    Gas futures are up about 34 percent since mid-February, with
cold late-winter weather putting a huge dent in inventories
while above-normal nuclear plant outages and stronger price
expectations added momentum.
    But most traders expect further upside to be difficult, with
milder, spring-like temperatures likely to curb heating demand
by late-month before warmer weather sparks any early cooling
    As of 9:26 a.m. EDT (1326 GMT), front-month May natural gas
futures on the New York Mercantile Exchange were at
$4.152 per million British thermal units, up 1.5 cents, or less
than 1 percent, after rising to $4.29 on Monday, the highest
level for a nearby contact since late July, 2011.
    The latest National Weather Service six- to 10-day forecast
issued on Monday again called for below-normal temperatures for
about the eastern half of the nation and above-normal readings
in the West.
    Nuclear outages totaled 27,300 megawatts, or 27 percent of
U.S. capacity, down from 27,500 MW out on Monday and 27,500 
MW out a year ago, but up from a five-year average outage rate
of 24,300 MW. 
    Last week's gas storage report from the U.S. Energy
Information Administration showed domestic inventories fell the
prior week by 14 billion cubic feet, below Reuters poll
estimates for a 21 bcf draw but above the year-ago gain of 11
bcf and the five-year average build of 15 bcf for that week.
    Domestic gas inventories of 1.673 trillion cubic feet are
nearly 33 percent below last year's record high and nearly 4
percent below the five-year average.

    Inventories started the heating season at record highs, but
two weeks ago stocks slid below the five-year norm for the first
time since September 2011.
    But last week's decline should be the last of the heating
season, with estimates for this week's report all looking for a
modest build.
    Early injection estimates for this week's report range from
22 bcf to 55 bcf versus a 21-bcf build during the same week last
year and a five-year average rise for that week of 39 bcf.
    Total gas pulled from storage this winter is about 2.25 tcf,
roughly 770 bcf, or 52 percent, more than last year and about 15
percent more than the normal heating-season draw.
    Baker Hughes data released on Friday showed the
gas-directed drilling rig count rose 2 from the prior week's
14-year low, to 377.