U.S. natgas futures edge off of 21-month spot chart high
* Front month hit highest mark since July 2011 on Thursday * Below-normal temperatures remain on tap for consuming regions * Nuclear power plant outages above year ago, five-year norm * Coming Up: Baker Hughes gas drilling rig data Friday By Eileen Houlihan NEW YORK, April 19 (Reuters) - U.S. natural gas futures edged lower early on Friday, as traders blamed profit-taking from Thursday's 21-month spot chart high. Still chilly weather in consuming regions of the nation and ongoing spring power plant outages were expected to keep demand for gas-fired generation firm. In addition, the season's first storage injection reported on Thursday came in below expectations, and lingering cold weather this month is expected to slow inventory builds and drive stocks further into deficit, fueling concerns over a tighter supply picture this year. Gas futures are up about 41 percent since mid-February, after cold and lingering winter weather put a huge dent in inventories. But most traders expect more upside to be difficult, with milder, spring-like temperatures likely to curb heating demand in the coming weeks, before much warmer weather sparks any early cooling demand. As of 9:26 a.m. EDT (1326 GMT), front-month May natural gas futures on the New York Mercantile Exchange were at $4.37 per million British thermal units, down 3.1 cents, or less than 1 percent. The contract rose to $4.429 on Thursday, the highest level for a nearby contact since late July 2011. The latest National Weather Service six- to 10-day forecast, issued on Thursday, 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 27,900 megawatts, or 28 percent of U.S. capacity, down from 28,500 MW out on Thursday, but up from 24,100 MW out a year ago and a five-year average outage rate of 25,300 MW. WEEKLY INVENTORY BUILD BELOW EXPECTATIONS Thursday's gas storage report from the U.S. Energy Information Administration showed domestic inventories rose last week by 31 billion cubic feet, below Reuters poll estimates for a 34 bcf build and the five-year average gain of 39 bcf for that week. Stocks, at 1.704 trillion cubic feet, are nearly 32 percent below last year and more than 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. Early injection estimates for next week's report range from 24 bcf to 48 bcf versus a 43-bcf build during the same week last year and a five-year average rise for that week of 50 bcf. Injections during the April-through-October stock building season on average total about 2 tcf, meaning stocks could head into next winter with about 3.7 tcf in the ground, well above what would be needed to meet even the coldest winter demand, but nearly 6 percent below last year's record peak of 3.929 tcf. Traders were waiting for the next Baker Hughes gas drilling rig report to be released later Friday. Data last week showed the gas-directed drilling rig count rose two from the prior week's 14-year low, to 377.
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