U.S. natgas futures edge higher amid still cold weather

Wed Apr 24, 2013 9:39am EDT
 
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* Front month remains below last week's 21-month chart high
    * Normal or below-normal temperatures back in forecasts
    * Nuclear power plant outages slip below average
    * Coming Up: EIA natgas storage data Thursday

    By Eileen Houlihan
    NEW YORK, April 24 (Reuters) - U.S. natural gas futures
edged higher early on Wednesday, lifted by expectations that
lingering cold weather in parts of the nation would continue to
curb storage injections, further tightening the supply picture.
    "Natural gas may continue to get support from more cold
weather," said Price Futures Group analyst Phil Flynn, noting
gas continued to be the best performing commodity of the year.
    Lingering cold in consuming regions, spring power plant
outages and a tightening supply picture helped lift nearby gas
futures to their highest level in nearly 21 months last week.
    Futures are up about 36 percent since mid-February, after
cold and lingering winter weather put a huge dent in
inventories.
    As of 9:26 a.m. EDT (1326 GMT), front-month May natural gas
futures on the New York Mercantile Exchange were at
$4.269 per million British thermal units, up 3.1 cents, or under
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 Tuesday called for above-normal temperatures in a
large portion of the Southwest and a small portion of New
England, with normal or below-normal readings in Florida, Texas,
the Northwest and across the mid-Continent.
    Nuclear outages totaled 23,600 megawatts, or 23 percent of
U.S. capacity, down from 24,400 MW out on Tuesday, 25,100 MW out
a year ago and a five-year average outage rate of 23,700 MW.
 
    
    INJECTION SEASON OFF TO SLOW START
    Last week's gas storage report from the U.S. Energy
Information Administration showed domestic inventories rose in
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 Thursday's EIA report range
from 19 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.
    Baker Hughes 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.