UPDATE 3-Warm weather outlook drives U.S. natgas futures up 4 pct
* Northeastern U.S. and Midwest expect hotter temperatures * Outlook for Texas and the South turns milder * Nuclear power plant outages back above normal By Eileen Houlihan and Joe Silha NEW YORK, June 17 (Reuters) - U.S. natural gas futures rose nearly 4 percent on Monday, backed by forecasts for hotter weather for the Northeast and Midwest later this week and next that should force more homeowners and businesses to crank up their air conditioners. Mild late-spring weather pressured front-month gas futures to fall nearly 12 percent in the last three weeks, the biggest three-week slide for the near contract in six months. "The spot natural gas futures contract is garnering support from what is looking like a change in the weather for the second half of June. The current forecasts suggest that there may now be a more definitive call on gas for cooling-related power generation demand," said Energy Management Institute partner Dominick Chirichella. Front-month July natural gas futures on the New York Mercantile Exchange rose 14.2 cents, or 3.8 percent, to settle at $3.875 per million British thermal units, its highest settle since June 5. The nearby contract traded between $3.738 and $3.899. It briefly dipped to a three-month low of $3.71 last week, after climbing to a 21-month high of $4.444 on May 1. Other months also rose significantly on Monday, with the August contract gaining 13.8 cents, or also nearly 4 percent, to end at $3.897 and winter months rising about 11 cents each. Traders do not expect the 2013 season's second tropical system, Tropical Depression Two in the western Caribbean Sea, to disrupt much Gulf of Mexico gas production, though the system could move into the Bay of Campeche and affect some oil output later this week. Nuclear plant outages totaled 8,500 megawatts, or 9 percent of U.S. capacity, down from 9,800 MW out a year ago, but up from a five-year average outage rate of 7,400 MW. Commodity Weather Group noted that computer model trends had turned warmer for the Midwest and East in the next six- to 10-days, but the chance for more precipitation could still lower overall temperatures. The private forecaster also noted that the South looked cooler than previously expected. Many traders remained skeptical of the upside, with inventories at comfortable levels and production still flowing at or near a record high. Baker Hughes data on Friday showed the gas-directed rig count fell last week by one to 353, just above the 18-year low of 350 hit five weeks ago. Last week's gas storage report from the U.S. Energy Information Administration showed total domestic gas inventories rose the prior week by 95 billion cubic feet to 2.347 trillion cubic feet. Early injection estimates for this week's EIA report range from 85 bcf to 95 bcf, versus a 63-bcf build during the same week last year and a five-year average increase for that week of 80 bcf.
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