UPDATE 3-U.S. natgas futures end lower, milder weather weighs
* Front month remains well under recent 21-month high * Weather forecasts mainly mild for 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 ended down more than 1 percent on Tuesday, as forecasts for mild weather hit market sentiment even though cash gas prices rose due to the return of weekday industrial demand after the Memorial Day holiday weekend. Traders said fairly mild weather expected for the next two weeks should curb late-season heating and early-season cooling demand and lead to more above-average inventory injections. "Weather forecasts are pointing to a fluctuating pattern across the East in the coming weeks, with above to well above-average temperatures expected in the next five days followed by normal to below-normal temperatures in the six- to 10-day period," said Addison Armstrong, senior director of market research at Tradition Energy in Stamford, Connecticut. Armstrong said the fluctuating weather patterns and early expectations for an above-average storage injection weighed on the market. Front-month June natural gas futures on the New York Mercantile Exchange slid 6.3 cents, or 1.49 percent, to settle at $4.174 per million British thermal units. The nearby contract, which expires on Wednesday, traded between $4.13 and $4.308. 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. Other months ended lower as well, with summer months ending down 6 cents each. In the cash market, gas for Wednesday delivery at the NYMEX benchmark Henry Hub in Louisiana rose 4 cents to $4.19, with late deals firming to 4 cents under the June contract, from deals done late Friday at a 6-cent discount. Gas on the Transco pipeline at the New York citygate jumped 35 cents to $4.41. The National Weather Service's 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 country. 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 in the same week last year and a five-year average rise for that week of 92 bcf.
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