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UPDATE 3-U.S. natgas futures end down, 1st loss in 4 sessions
June 20, 2013 / 3:43 PM / 4 years ago

UPDATE 3-U.S. natgas futures end down, 1st loss in 4 sessions

* Stocks data viewed as bearish relative to 5-year average
    * Hotter weather expected for U.S. Northeast, Midwest
    * Coming up: Baker Hughes rig data, CFTC trade data Friday

 (Adds analyst quote, coal data, updates with closing prices)
    By Joe Silha
    NEW YORK, June 20 (Reuters) - U.S. natural gas futures ended
lower on Thursday, pressured by technical selling after three
straight gains and a slightly bearish weekly inventory report
despite fairly hot weather forecasts for northern tier states
that should stir more demand.
    The U.S. Energy Information Administration reported that 
total domestic gas inventories rose last week by 91 billion
cubic feet to 2.438 trillion cubic feet. 
    While traders noted the weekly build was in line with the
Reuters poll estimate of 90 bcf, some pegged it as bearish,
coming in well above the five-year average for that week of 80
bcf. Mild late spring weather has driven injections above that
benchmark for three straight weeks.
    "The (EIA) number came in above last year and the five-year
average and was just bearish enough to send the bulls to the
sidelines, but we're coming into more summer-like weather, so I
don't see too much downside," said Jonathan Lee at Ecova Inc in
Spokane, Washington.
    Front-month gas futures on the New York Mercantile
Exchange ended down 8.6 cents, or 2.2 percent, at $3.877 per
million British thermal units after sinking to an intraday low
of $3.835 right after the EIA report.
    The gas price slide last week to a three-month low of $3.71
came close to making gas competitive with coal for power
generation. But the steep drop in Central Appalachian coal
prices this week to an eight-month low of about $55 per short
ton kept coal as the fuel of choice for electric utilities.
    Warmer weather forecasts for the Northeast and Midwest
helped drive the front contract up 6.2 percent in the previous
three sessions, but many traders remained skeptical of the
upside with inventories comfortable and gas production flowing
at or near a record high.
    MDA Weather Services still expects a broad area of
above-normal to much-above-normal temperatures to stretch across
the northern half of the United States in its six- to 10-day
outlook. But the forecaster noted that readings turn cooler from
the Midwest to East and South in the 11- to 15-day period.
    The weekly inventory build trimmed the deficit relative to
last year by 28 bcf to 559 bcf, or about 20 percent below last
year's record highs at that time. It also cut 11 bcf from the
shortfall versus the five-year average, leaving stocks just 47
bcf, or 2 percent, below that benchmark.
    (Storage graphic: link.reuters.com/mup44s )
    Early injection estimates for next week's report range from
75 bcf to 95 bcf, versus a 58-bcf build during the same week
last year and a five-year average rise for that week of 79 bcf. 
  
    Traders were waiting for the next Baker Hughes 
drilling rig report on Friday. Last week's data showed the gas
rig count was still hovering just above an 18-year low.
    (Rig graphic: link.reuters.com/nuz86t)
    U.S. production has not slowed much, if at all, this year.
EIA still expects domestic gas output in 2013 to post a record
high for a third straight year.     

 (Additional reporting by Eileen Houlihan; Editing by John
Wallace, Dale Hudson , Jim Marshall and Marguerita Choy)

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