U.S. natgas futures rise on still cool Northeast weather

Tue May 14, 2013 9:30am EDT
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* Front month remains well below recent 21-month high
    * Weather mixed over the nation, cool early in week in East
    * Nuclear power plant outages still above normal

    By Eileen Houlihan
    NEW YORK, May 14 (Reuters) - U.S. natural gas futures rose
more than 1 percent early on Tuesday, lifted by continued cool
weather early this week in the Northeast that could again slow
down inventory builds.
    In addition, above-average nuclear power plant outages also
helped firm near-term demand.
    But traders expect the cooldown in the East to be the last
stretch of heating demand after a long, cold winter put a huge
dent in inventories and a cool spring led to a slow start to the
injection season.
    But forecasts for milder weather later in the month should
curb any lingering heating loads before heavy cooling demand
kicks in.
    As of 9:16 a.m. EDT (1316 GMT), front-month June natural gas
futures on the New York Mercantile Exchange were at
$3.984 per million British thermal units, up 5.9 cents, or more
than 1 percent.
    The contract hit a one-month low of $3.883 last week after
climbing to a 21-month high of $4.444 on May 1.
    The latest National Weather Service six to 10-day forecast
issued on Monday called for above-normal temperatures in the
Northeast and Southwest and below-normal readings along the Gulf
Coast stretching into the Plains as well as in the Northwest.
    Nuclear plant outages totaled 20,100 megawatts, or 20
percent of U.S. capacity, down from 20,400 MW out on Monday, but
up from 16,800 MW out a year ago and a five-year average outage
rate of 17,900 MW. 
    Last week's gas storage report from the U.S. Energy
Information Administration showed domestic inventories rose the
prior week by 88 billion cubic feet, above Reuters poll
estimates for an 83-bcf build, a year-ago gain of 30 bcf, and
the five-year average build of 69 bcf for that week.
    But inventories, which started the injection season about
three weeks later than expected due to the cold spring, are at
1.865 trillion cubic feet, more than 28 percent below last year
and 5 percent below the five-year average.

    Early injection estimates for this week's EIA report range
from 88 bcf to 106 bcf, versus a 56-bcf build in the same week
last year and a five-year average rise for that week of 83 bcf.
    Baker Hughes' data last week showed the number of
rigs drilling for natural gas in the United States slid by four
to an 18-year low of 350.