U.S. natgas futures slide 2 pct in quiet post-holiday trade

Fri Jul 5, 2013 9:26am EDT
 
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* Front month remains above recent four-month spot low
    * Above-normal temperatures still on tap for both coasts
    * Nuclear plant outages continue above average

    By Eileen Houlihan
    NEW YORK, July 5 (Reuters) - U.S. natural gas futures fell
more than 2 percent early on Friday in quiet post-holiday trade
despite above-normal nuclear power plant outages and forecasts
for heat in consuming regions in the Northeast in the coming
days.
    Traders said many offices remained shut on Friday or had
skeleton crews after closing on Thursday for the U.S.
Independence Day holiday.
    Milder weather in consuming regions and healthy inventories
should help limit near-term gains, traders said, despite a slew
of 90 degree (Fahrenheit) temperatures expected for key
Northeast cities over the next few days that should stir demand
for air conditioning.
    As of 9:18 a.m. EDT (1318 GMT), front-month August natural
gas futures on the New York Mercantile Exchange were at
$3.601 per million British thermal units, down 8.9 cents, or
more than 2 percent.
    The contract rose in the prior three sessions, boosted by
the hotter weather outlook.
    The latest National Weather Service six- to 10-day forecast,
issued on Thursday, called for above-normal temperatures for
about the western third of the nation and along much of the East
Coast, with normal or below-normal readings in the middle of the
nation.
    Wednesday's gas storage report from the U.S. Energy
Information Administration, issued a day early this week due to
the holiday on Thursday, showed total domestic inventories rose
last week by 72 billion cubic feet, in line with Reuters poll
estimates for a 71 bcf build and the five-year average build of
71 bcf for that week. 
    Total gas inventories at 2.605 trillion cubic feet are about
16 percent below last year's record high level, but only 1
percent below the five-year average level.

    Early injection estimates for next week's storage report
range from 82 bcf to 102 bcf, versus a 34 bcf build during the
same week last year and a five-year average increase for that
week of 74 bcf.
    Nuclear plant outages on Friday totaled 5,800 megawatts, or
6 percent of U.S. capacity, even with Wednesday's outages, down
from 9,300 MW out a year ago, but up from a five-year average
outage rate of 4,900 MW. 
    Baker Hughes data on Wednesday, also issued early
this week due to the holiday, showed the gas drilling rig count
rose for a second straight week, gaining 2 to 355, after posting
an 18-year low of 349 three weeks ago.