U.S. natgas futures edge higher amid tighter supply
* Front month still below last week's 21-month chart high * Above-normal temperatures back on tap in most forecasts * Nuclear power plant outages still above average By Eileen Houlihan NEW YORK, April 23 (Reuters) - U.S. natural gas futures edged higher early on Tuesday, consolidating after Monday's more than 4-percent slide, as traders weighed a tightening supply picture against falling seasonal demand. "Weather forecasts are little changed from yesterday, with below to well-below-normal temperatures expected across the country in the next five-days, followed by a shift warmer at the end of this month and the early part of May," noted Addison Armstrong, senior director of market research at Tradition Energy in Stamford, Connecticut. The milder weather should finally start to curb heating demand prior to the onset of cooling demand season, but before its arrival still cold weather is expected to slow storage injections. 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 37 percent since mid-February, after cold and lingering winter weather put a huge dent in inventories. As of 9:15 a.m. EDT (1315 GMT), front-month May natural gas futures on the New York Mercantile Exchange were at $4.283 per million British thermal units, up 1.6 cents, or less than 1 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 Monday called for above-normal temperatures for most of the West and a large portion of the East Coast, with normal or below-normal readings along the Gulf Coast and in the mid-Continent. Nuclear outages totaled 24,400 megawatts, or 24 percent of U.S. capacity, down from 25,800 MW out on Monday and 24,700 MW out a year ago, but up from a five-year average outage rate of 23,900 MW. INJECTION SEASON OFF TO SLOW START 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 average. Inventories started the heating season at record highs, but three weeks ago slid below the five-year norm for the first time since September 2011. Early injection estimates for this week's report range from 19 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 last week showed the gas-directed rig count rose two to 379, after hitting a 14-year low of 375 three weeks ago.
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