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U.S. natgas futures edge higher ahead of weekly storage data
January 10, 2013 / 2:32 PM / 5 years ago

U.S. natgas futures edge higher ahead of weekly storage data

* Front month remains above last week's 3-month spot low
    * Cold weather still expected in some long-term outlooks
    * Coming Up: EIA natgas storage data Thursday

    By Eileen Houlihan
    NEW YORK, Jan 10 (Reuters) - U.S. natural gas futures edged
higher early on Thursday, before  weekly government storage data
expected to show a large withdrawal from winter inventories.
    In addition, cold weather remained in the longer-term
forecasts despite mild near-term weather that has curbed heating
demand in consuming regions.
    Most traders and analysts expect weekly data from the U.S.
Energy Information Administration to show a draw of about 186
billion cubic feet when it is released at 10:30 a.m. EST (1530
GMT), a Reuters poll showed. 
    Last year stocks fell 95 bcf in the same week and on average
over the past five years have fallen about 149 bcf that week.
    As of 9:24 a.m. EST (1424 GMT), front-month February gas
futures on the New York Mercantile Exchange were at
$3.133 per million British thermal units, up 2 cents, or less
than 1 percent.
    The front-month contract fell to $3.05 last week, a contract
low and the lowest mark for a spot contract since late
September.
    The latest National Weather Service six-to-10-day forecast
issued on Wednesday called for below-normal temperatures for a
little more than the western half of the United States and
mostly normal readings in the East.
    Nuclear outages totaled 8,200 megawatts, or 8 percent, of
U.S. capacity, down slightly from 8,500 MW on Wednesday, but up
from 7,900 MW out a year ago and a five-year average outage rate
of about 6,200 MW. 
    
    STORAGE LEVELS REMAIN BLOATED
    Last week's EIA gas storage report showed inventories fell
the prior week by 135 bcf, above industry expectations for a 127
bcf draw. 
    Despite the big draw, storage remains at 3.517 trillion
cubic feet, nearly 1 percent above year-ago levels and more than
12 percent above the five-year average level.
    (Storage graphic: link.reuters.com/mut84t)
    Inventories started the heating season in early November at
a record high 3.929 tcf, the fourth straight year that
inventories have headed into the heating season at an all-time
peak.
    
    RIGS GAIN, OUTPUT STILL NEAR RECORD
    Baker Hughes data last week showed the gas-directed rig
count rose by eight to 439, its third straight weekly gain.
 
    But drilling for natural gas has mostly declined for more
than a year, with gas rigs down 53 percent since peaking at 936
in October 2011.
    (Rig graphic: r.reuters.com/dyb62s)
    The EIA this week said it expects gas output in 2013 to rise
to a record high of 69.84 bcf per day, the third straight annual
record.

 (Editing by Grant McCool)

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