Cold forecasts prop up U.S. natgas futures for fourth day

Fri Nov 8, 2013 9:25am EST
 
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NEW YORK, Nov 8 (Reuters) - U.S. natural gas futures edged
higher for a fourth straight day on Friday, backed by chilly
weather forecasts for the next 10 days that should force more
homeowners and businesses to turn up their heaters.
    Front-month futures, which posted a contract low and 2-1/2
month low of $3.379 on Tuesday, are up 2.8 percent in the last
four sessions and about 0.8 percent so far this week.
    But many traders remained skeptical of the upside despite
the near-term chill, with stockpiles comfortable, production
flowing at a record high pace and another warm-up expected late
next week, particularly for the Midwest.
    At 9:10 a.m. EST (1410 GMT), front-month gas futures 
on the New York Mercantile Exchange were up 2.2 cents at $3.541
per million British thermal units, after trading between $3.51
and $3.579.
    Traders mostly shrugged off Thursday's 35 million cubic feet
weekly inventory build, noting it matched the Reuters poll
estimate and came in close to the five-year average for that
week. Most viewed the injection as neutral for prices.
    The U.S. Energy Information Administration reported that
total gas inventories rose last week to 3.814 trillion cubic
feet, 2.9 percent below last year's record highs at that time
but 1.5 percent above the five-year average. 
    Early injection estimates for next week's storage report
range from 16 bcf to 26 bcf. That would compare to the 12 bcf
draw seen during the same year-ago week and the five-year
average increase of 19 bcf for that week.
    Traders were waiting for the next Baker Hughes 
drilling rig report on Friday. The gas rig count has risen in 11
of the last 19 weeks, stirring talk that new pipelines and
processing plants may be encouraging producers to pump more gas
into an already well-supplied market.    
    The EIA still expects U.S. gas production in 2013 to hit a
record high for the third straight year.   
    Nuclear plant outages on Friday totaled 11,281 megawatts, or
about 12 percent of U.S. capacity. That was down from Thursday's
total of 12,043 MW and well below the 26,958 MW out one year ago
and the five-year average outage rate of 20,871 MW.