U.S. natgas futures slide 2 pct as warmer weather weighs

Mon Apr 22, 2013 9:32am EDT
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* Front month remains below last week's 21-month chart high
    * Above-normal temperatures on tap for most of the United
    * Nuclear power plant outages still above average

    By Eileen Houlihan
    NEW YORK, April 22 (Reuters) - U.S. natural gas futures slid
about 2 percent early on Monday, as weather forecasts for late
this month and early next began to show a return to above-normal
temperatures, expected to curb recent late-season heating
    Lingering cold in consuming regions, ongoing spring power
plant outages and a tightening supply picture all helped lift
nearby gas futures to their highest level in nearly 21 months
last week.
    Gas futures are still up about 39 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 now on the horizon expected to
curb heating demand before much warmer weather sparks any early
cooling demand.
    As of 9:28 a.m. EDT (1328 GMT), front-month May natural gas
futures on the New York Mercantile Exchange were at
$4.311 per million British thermal units, down 9.7 cents, or
just over 2 percent.
    The contract rose to $4.429 last week, the highest level for
a nearby contact since late July 2011.
    The latest National Weather Service six to 10-day forecast
issued on Sunday called for above-normal temperatures for nearly
the entire country.
    Nuclear outages totaled 25,800 megawatts, or 26 percent of
U.S. capacity, down from 27,900 MW out on Friday, but up from
25,400 MW out a year ago and a five-year average outage rate of
24,400 MW. 
    Last week's gas storage report from the U.S. Energy
Information Administration showed domestic inventories rose the
prior 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

    Inventories started the heating season at record highs, but
three weeks ago stocks slid below the five-year norm for the
first time since September 2011.
    Early injection estimates for this 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.
    Baker Hughes gas drilling rig data on Friday showed
the gas-directed rig count rose two to 379, after hitting a
14-year low of 375 three weeks ago.