U.S. natgas futures edge lower ahead of weekly EIA storage data
* Front month still below recent 21-month high * Weather expected to moderate over the next two weeks * Nuclear power plant outages back above average * Coming Up: EIA gas storage data 10:30 a.m. EDT (1430 GMT By Eileen Houlihan NEW YORK, May 9 (Reuters) - U.S. natural gas futures edged lower early on Thursday, ahead of expectations for another large weekly inventory build and amid milder, spring-like temperatures blanketing most of the nation. Last week's unexpectedly large weekly stock build led to a 7-percent selloff on Thursday before prices recovered slightly on Friday. Prices remain well under last week's 21-month high hit at midweek. A long, cold winter put a huge dent in inventories and lingering cool weather this spring led to a slow start to the injection season. But the onset of milder spring weather starting this week has curbed late-season heating demand before heavy cooling loads kick in. Most traders and analysts expect weekly data from the U.S. Energy Information Administration to show a build of about 83 billion cubic feet when it is released at 10:30 a.m. EDT (1430 GMT), a Reuters poll showed. Stocks rose 30 bcf during the same week last year and on average over the past five years have gained 69 bcf that week. As of 9:22 a.m. EDT (1322 GMT), front-month June natural gas futures on the New York Mercantile Exchange were at $3.956 per million British thermal units, down 2.2 cents. The contract hit a one-month low of $3.895 on Wednesday, well below the recent 21-month high of $4.444. The latest National Weather Service eight to 14-day forecast issued on Wednesday again called for above-normal temperatures for about the western half of the nation and below-normal readings in the Southeast and most of Texas. Near-normal temperatures were expected for the Midwest and mid-Atlantic and much of the Northeast. Nuclear plant outages totaled 20,900 megawatts, or 21 percent of U.S. capacity, up from 18,800 MW out on Wednesday and a five-year average outage rate of 20,200 MW, but down from 21,400 MW out a year ago. LARGER-THAN-EXPECTED BUILD BUT STOCKS BELOW NORMAL Last week's EIA gas storage report showed domestic inventories rose in the prior week by 43 bcf, above Reuters poll estimates for a 28 bcf build and the year-ago gain of 31 bcf. But inventories started the injection season about three weeks later than expected due to the cold spring. Stocks, at 1.777 trillion cubic feet, are nearly 31 percent below last year and more than 6 percent below the five-year average. Baker Hughes data last week showed the number of rigs drilling for natural gas in the United States fell by 12 to an 18-year low of 353. EIA earlier this week raised its estimate for domestic natural gas production in 2013, expecting output this year to be up about 1 percent from 2012's levels. If realized, it would be the third straight year of record production.
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