U.S. natgas futures slip on milder weather, storage expectations

Tue May 28, 2013 9:28am EDT
 
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* Front month remains well under recent 21-month high
    * Weather forecasts mainly mild for the next two weeks
    * Nuclear power plant outages back above normal
    * Coming Up: EIA natgas storage data on Thursday

    By Eileen Houlihan
    NEW YORK, May 28 (Reuters) - U.S. natural gas futures slid
about 2 percent early on Tuesday, extending Friday's losses
after the long Memorial Day holiday weekend.
    Traders said fairly mild weather expected for the next two
weeks and expectations for another above-average inventory
injection were weighing on prices despite the return of weekday
industrial demand following the holiday.
    As of 9:15 a.m. EDT (1315 GMT), front-month June natural gas
futures on the New York Mercantile Exchange were at
$4.153 per million British thermal units, down 8.4 cents, or
just under 2 percent.
    The nearby contract expires on Wednesday. The front month
hit a one-month low of $3.883 on May 9 after climbing to a
21-month high of $4.444 on May 1.
    The latest National Weather Service six- to 10-day forecast
and the eight- to 14-day outlook, both issued on Monday, called
for above-normal temperatures for most of the nation. But
traders said much of the above-normal readings may not be hot
enough to spark heavy air conditioning demand yet.
    Nuclear plant outages totaled 14,700 megawatts, or 15
percent of U.S. capacity, down from 16,500 MW out a year ago,
but up from a five-year average outage rate of 13,900 MW.
 
    Early injection estimates for Thursday's gas storage report
from the U.S. Energy Information Administration range from 80
billion cubic feet to 103 bcf versus a 72-bcf build during the
same week last year and a five-year average rise for that week
of 92 bcf.