U.S. natgas futures seesaw early, Northeast heat to limit losses

Fri May 31, 2013 9:33am EDT
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* Front month still below recent 21-month high
    * Above-normal temperatures on tap for Northeast
    * Nuclear power plant outages remain below normal
    * Coming Up: Baker Hughes gas drilling rig data Friday

    By Eileen Houlihan
    NEW YORK, May 31 (Reuters) - U.S. natural gas futures prices
seesawed on either side of unchanged territory early Friday,
with near-term heat blanketing consuming regions in the
Northeast expected to limit more losses.
    Traders said the first real stretch of above-normal
temperatures in the Northeast this spring has spurred early
season cooling demand and served as a reminder that summer
weather would arrive soon.
    As of 9:22 a.m. EDT (1322 GMT), front-month July natural gas
futures on the New York Mercantile Exchange were at
$4.019 per million British thermal units, down 0.4 cent, after
trading between $4.009 and $4.064.
    The nearby contract fell nearly 6 percent in the past four
consecutive sessions. It hit a one-month low of $3.883 on May 9
after climbing to a 21-month high of $4.444 on May 1.
    Data from the U.S. Energy Information Administration on
Thursday showed inventories rose last week by 88 billion cubic
feet, in line with Reuters poll estimates, but above the
year-ago build of 72 bcf. Stocks have gained 92 bcf on average
that week over the past five years. 
    Stocks, at 2.141 trillion cubic feet, are 664 bcf, or nearly
24 percent, below year-ago levels. They are also 88 bcf, or
nearly 4 percent, below the five-year average.

    Early estimates for next week's EIA gas storage report range
from 78 bcf to 95 bcf versus a year-ago gain of 63 bcf and a
five-year average build of 92 bcf for that week.
    Forecaster MDA Weather Services called for a hot weekend in
the Northeast and showed above-normal temperatures in the entire
region in its one- to five-day forecast map.
    The latest National Weather Service six- to 10-day forecast
issued on Thursday called for above-normal temperatures in the
western third of the nation and in the Northeast, and mainly
normal readings elsewhere. 
    Nuclear plant outages totaled 12,400 megawatts, or 12
percent of U.S. capacity, down from 13,600 MW out on Thursday,
17,700 MW out a year ago and a five-year average outage rate of
13,700 MW. 
    Traders awaited the next Baker Hughes gas drilling
rig report to be issued later Friday. Last week's report showed
the gas-directed rig count was unchanged at 354. The count
posted an 18-year low of 350 three weeks ago.