U.S. natural gas futures edge higher ahead of July expiration

Wed Jun 26, 2013 9:17am EDT
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NEW YORK, June 26 (Reuters) - U.S. natural gas futures edged
higher, backed by a slightly warmer extended weather outlook and
some technical buying ahead of the July contract expiration
later on Wednesday.
    Despite Tuesday's break of support, many technical traders
agreed the market was overbought and due for a short-covering
bounce after sliding 8 percent in the previous four sessions,
the biggest four-day drop for front futures in seven weeks.
    While the overnight outlook for the six-to-15-day period did
turn slightly warmer, many traders see only limited upside
potential without a sustained, broad-based heat wave,
particularly with inventories comfortable and gas production
still at or near a record high.   
    At 9 a.m. EDT (1300 GMT), front-month July gas futures
 on the New York Mercantile Exchange, which expire later
on Wednesday, were up 3 cents at $3.677 per million British
thermal units after trading between $3.646 and $3.712. The front
contract posted a 3-1/2-month low of $3.645 on Tuesday.
    Heat remains focused in the West for the next two weeks, but
private forecaster MDA Weather Services noted that the Northeast
was slowly trending warmer, with higher temperatures expected to
stretch across northern tier states late in the period.