UPDATE 3-U.S. natgas futures end down for fifth day, lose 8 pct in May

Fri May 31, 2013 3:09pm EDT
 
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* Front month remains well below recent 21-month high
    * Nuclear power plant outages also below normal
    * Near-term Northeast heat to moderate next week


    By Eileen Houlihan
    NEW YORK, May 31 (Reuters) - U.S. natural gas futures slid
about 1 percent on Friday, dipping below $4 per million British
thermal units and extending losses for a fifth straight session.
    The nearby contract, which had posted two straight weekly
gains, fell nearly 6 percent in the holiday-shortened week and
was down more than 8 percent in May.
    Traders said near-term heat blanketing consuming regions in
the Northeast limited some losses, but the heat was expected to
be short-lived and milder temperatures were on tap for most of
the nation next week.
    Still, the first real stretch of above-normal temperatures
in the Northeast this spring spurred early season cooling demand
and served as a reminder that summer weather would arrive soon.
    "The natural gas market needs fundamental support to move
higher. So far that support is not emerging with nuclear outages
running well below last year and the five-year average along
with a mostly neutral temperature forecast," said Energy
Management Institute's Dominick Chirichella.
    Front-month July natural gas futures on the New York
Mercantile Exchange slid 3.9 cents, or just under 1
percent, to settle at $3.984, closing under $4 for the first
time since May 16, according to Reuters data.
    The nearby contract traded between $3.981 and $4.064. 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.
    Other months ended lower as well, with the August contract
 sliding 4 cents, or also near 1 percent, to end at
$4.003. Winter months lost about 5 cents each.
    In the cash market, gas for weekend delivery at the NYMEX
benchmark Henry Hub in Louisiana slid 10 cents to
$4.02. Late deals were done at a 4-cent discount to the front
month, even with deals done early Thursday.
    With milder weather expected to return to the Northeast by
Monday, gas on the Transco pipeline at the New York citygate fell 75 cents to $4.17.
    Baker Hughes drilling rig data on Friday showed the
gas-directed rig count was unchanged for a second straight week
at 354. The count posted an 18-year low of 350 three weeks ago.
 

    Forecaster MDA Weather Services called for a hot weekend in
the Northeast and showed above-normal temperatures along much of
the East Coast 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. 
    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.