U.S. natgas futures seesaw early, tighter supply supports
* Front month remains below last week's 21-month chart high * Weather outlooks mixed for late April, early May * Nuclear power plant outages remain below average * Coming Up: Baker Hughes gas drilling rig data Friday By Eileen Houlihan NEW YORK, April 26 (Reuters) - U.S. natural gas futures seesawed on either side of unchanged early on Friday, with concerns over a tighter supply picture this year after another light weekly inventory injection underpinning prices. Inventories started the injection season about three weeks later than expected due to an unusually cold spring. Still chilly weather early this week is expected to continue to slow inventory builds and drive stocks further into deficit, relative to the five-year average. The lingering cold dented inventories, while seasonal power plant outages helped keep demand for gas-fired generation firm, lifting nearby gas futures to their highest level in nearly 21 months last week. Futures are still up about 33 percent since mid-February. But with milder, spring-like weather expected to slow demand soon, most traders expect further upside to be difficult. As of 9:21 a.m. EDT (1321 GMT), front-month May natural gas futures on the New York Mercantile Exchange, which expire later Friday, were at $4.153 per million British thermal units, down 1.4 cents. The contract, which moved in electronic trade between $4.14 and $4.182, 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 Thursday called for above-normal temperatures in a large portion of the Southwest and a small part of New England, with below-normal readings across the Southeast and in Texas. Nuclear outages totaled 23,200 megawatts, or 23 percent of U.S. capacity, up from 22,900 MW out on Thursday, but down from 24,400 MW out a year ago and a five-year average outage rate of 24,400 MW. ANOTHER LIGHT INVENTORY BUILD Thursday's gas storage report from the U.S. Energy Information Administration showed domestic inventories rose last week by 30 bcf, below Reuters poll estimates for a 32 bcf build, the year-ago gain of 43 bcf and the five-year average build of 50 bcf for that week. Stocks, at 1.734 trillion cubic feet, are nearly 32 percent below last year and more than 5 percent below the five-year average. Early injection estimates for next week's report range from 15 bcf to 40 bcf versus a 31-bcf build during the same week last year and a five-year average rise of 67 bcf for that week. Traders waited for the next Baker Hughes Inc drilling rig report to be released on Friday. 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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