UPDATE 3-U.S. natgas futures end up in seesaw trade, EIAs neutral
* EIA natgas storage build mostly seen as neutral * Cold extended forecast supports prices, despite warm up * Comfortable storage, record production limit upside * Coming Up: Baker Hughes rig data, CFTC trade data Friday By Joe Silha NEW YORK, Nov 14 (Reuters) - U.S. natural gas futures reversed course and ended higher on Thursday as investors focused on colder late-month weather that should stir more demand and shrugged off weekly inventory data and forecasts for a brief warm up later this week. The U.S. Energy Information Administration reported that total gas inventories rose last week by 20 billion cubic feet to 3.834 trillion cubic feet, just 2 percent below last year's record highs at that time and 1.5 percent above the five-year average. Many traders viewed the build, likely to be the last of the injection season, as neutral for prices, noting it came in close to the Reuters poll estimate of 21 bcf and the five-year average gain for that week of 19 bcf. "People were taking profits early, but there was decent buying at the lower numbers. It feels like there's a floor under the market, but with conflicting weather reports, I don't expect a big price move in either direction right now," a Pennsylvania-based cash trader said. Front-month gas futures on the New York Mercantile Exchange ended up 3.9 cents, or 1.1 percent, at $3.605 per million British thermal units, after trading between $3.491 and $3.618. Prices, which had been trading down nearly 2 percent in the $3.50 area before the EIA report was released at 10:30 a.m. EST, mostly edged higher during the rest of the session. The nearby contract fell to a 2-1/2 month low of $3.379 per mmBtu early last week, but finished the week up 1.3 percent, its first weekly gain in four weeks. The contract is up about 1.3 percent so far this week. Some technical traders said the market seemed stuck in a range, waiting for a reason to break out. They pegged front-month resistance in the $3.65 area, with support at $3.50 and then at recent lows in the $3.40 area. After a brief, late-week warm-up in the Northeast and Midwest, MDA Weather Services noted the six- to 10-day and 11- to 15-day forecasts still favored a colder-than-normal outlook for the central and eastern United States. While that should stir more heating demand, many traders see only limited upside potential for prices, with stockpiles comfortable and production flowing at a record-high pace. Early withdrawal estimates for next week's storage report range from 15 bcf to 46 bcf. That would compare to a 36 bcf draw seen during the same year-ago week and the five-year average decline for that week of 2 bcf. Traders were waiting for the next Baker Hughes drilling rig report on Friday. The gas rig count has risen in 12 of the last 20 weeks, stirring talk that new pipelines and processing plants may be encouraging producers to hook up more wells and pump more gas into an already well-supplied market. The EIA on Wednesday raised its estimate for domestic natural gas production in 2014, expecting output to be up more than 1 percent from 2013's record-high levels. In the ICE cash market, gas for Friday delivery at Henry Hub , the benchmark supply point in Louisiana, slid 16 cents to $3.52, with late differentials weakening to about 5 cents under NYMEX from a 3-cent premium Wednesday. Gas on the Transco pipeline at the New York citygate tumbled 35 cents to $3.43 on the milder late-week outlook. Chicago was 16 cents lower at $3.56. For daily ICE U.S. cash gas prices, click on .
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