U.S. natgas futures edge higher after 3-percent slide

Fri May 17, 2013 9:37am EDT
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* Front month still well below recent 21-month high
    * Weather forecasts mixed throughout the nation
    * Nuclear power plant outages remain above normal
    * Coming Up: Baker Hughes gas drilling rig data Friday

    By Eileen Houlihan
    NEW YORK, May 17 (Reuters) - U.S. natural gas futures edged
higher early on Friday, after a big, 3-percent drop on Thursday
that followed the release of a third straight above-average
weekly inventory build.
    But traders said milder, spring-like weather on tap for most
of the nation in the coming days and weeks would do little to
spur any early-season cooling demand.
    As of 9:26 a.m. EDT (1326 GMT), front-month June natural gas
futures on the New York Mercantile Exchange were at
$3.938 per million British thermal units, up 0.6 cent.
    The nearby 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 Wednesday called for above-normal temperatures in the
Southwest and along the mid-Atlantic Coast and below-normal
readings along the Gulf Coast and in the Northwest. But normal
temperatures were on tap for the majority of the country.
    Nuclear plant outages totaled 18,100 megawatts, or 18
percent of U.S. capacity, down from 19,800 MW out on Thursday,
but up from 16,100 MW out a year ago and a five-year average
outage rate of 17,700 MW. 
    Thursday's gas storage report from the U.S. Energy
Information Administration showed domestic inventories rose last
week by 99 billion cubic feet, above Reuters poll estimates for
a 95 bcf build, the year-ago gain of 56 bcf and the five-year
average build for that week of 83 bcf. 
    The build exceeded expectations for a third straight week,
but total stocks, at 1.964 trillion cubic feet, are still more
than 26 percent below last year's levels and more than 4 percent
below the five-year average level.

    Early injection estimates for next week's EIA storage report
range from 87 bcf to 100 bcf versus a 75-bcf build during the
same week last year and a five-year average rise for that week
of 90 bcf.
    Traders were waiting for the next Baker Hughes 
drilling rig report to be released on Friday, after last week's
data showed the gas-directed rig count slid to an 18-year low of