U.S. natgas futures fluctuate on bitter winter, forecast for warm
NEW YORK, Feb 14 (Reuters) - U.S. natural gas futures fluctuated between gaining and losing in early trading on Friday as forecasts for warmer weather pushed against storage levels drawn down by the winter's bitter cold so far. The warmer-than-average temperatures, as forecasted by MDA weather services, would bring temperatures 15 degrees above average to the lower-central and eastern U.S., regions that have been gripped by weather far colder than average most of the winter and moving gas prices higher on high demand for heating. On Thursday, the front-month contract gained on the storage report, climbing above $5 per million British thermal units, but the rally was muted by impending warmer weather, said Aaron Calder, senior market analyst at Gelber & Associates. Storage levels of natural gas were drawn down 237 billion cubic feet over the week ended Feb. 7, a report from the U.S. Energy Information Administration showed Thursday. The withdrawal was over 50 percent more than in the same week last year and well above the five-year average, as extreme cold weather plagued the U.S. Midwest and Northeast. Thursday's EIA report pegged remaining gas in storage at 1.686 Bcf, the lowest since 2004 for early February, with expectations for two more large weekly drawdowns as the winter draws to a close. Reuters analysts predict drawdowns for the week ending Feb. 14 to fall within 212 to 240 billion cubic feet. Front-month natural gas futures on the New York Mercantile Exchange fell 5.4 cents, or 1.03 percent, to $5.169 per million British thermal units at 9:40AM EST (14:40GMT). In the cash market, gas at the Henry Hub , the benchmark supply point in Louisiana, traded for Monday delivery up 23 cents to $5.53 per MmBtu on average. Early trade differentials were at a 36-cent premium to the NYMEX. In New York, next-day gas on the Transco Zone 6 pipeline had not yet traded. The coldest winter in decades has drained stockpiles quicker than ever, forced rationing, and pushed prices to record highs, revealing the difficulties of storing and transporting fuel across the continent. Nuclear plant outages, which create a draw on natural gas as a substitute power source, were at about 7,500 megawatts, down from 7,700 MW on Thursday. That compares with 15,000 MW out a year ago and a five-year average outage rate of 9,400 MW.
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