U.S. natgas futures edge up, remain under Monday's 20-mth high

Wed Apr 17, 2013 9:24am 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
    * Coming Up: EIA natgas storage data Thursday

    By Eileen Houlihan
    NEW YORK, April 17 (Reuters) - U.S. natural gas futures
edged higher early on Wednesday, lifted by forecasts for
continued below-normal temperatures in consuming regions of the
nation, but remained below Monday's highest mark in more than 20
    A tightening supply picture and continuing spring nuclear
power plant outages also helped underpin prices.
    Gas futures are up about 34 percent since mid-February,
after cold late-winter weather put a huge dent in inventories.
    But most traders expect further upside to be difficult, with
milder, spring-like temperatures likely to curb heating demand
by late this month, before warmer weather sparks any early
cooling demand.
    As of 9:15 a.m. EDT (1315 GMT), front-month May natural gas
futures on the New York Mercantile Exchange were at $4.19
per million British thermal units, up 3 cents, or just under 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 Tuesday, again called for below-normal temperatures
for about the eastern half of the nation and mostly above-normal
readings in the West.
    Nuclear outages totaled 26,800 megawatts, or 27 percent of
U.S. capacity, down from 27,300 MW on Tuesday and 27,000 MW a
year ago, but up from a five-year average outage rate of 24,400
    Last week's gas storage report from the U.S. Energy
Information Administration showed domestic inventories fell in
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.
    Last week's inventory 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 Thursday's gas storage report
range from 15 bcf to 45 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 last week showed the gas-directed
drilling rig count rose 2 from the prior week's 14-year low, to