NEW YORK, Dec 31 (Reuters) - U.S. natural gas futures reversed the previous day’s gains, falling by as much as 2 percent early Tuesday on a forecast that called for a warmer 11- to 15-day outlook and end-of-the-year profit-taking.
MDA Weather Services moderated its 11- to 15-day forecast with warmer temperatures from coast to coast. The previous day, the 11- to 15-day forecast called for colder temperatures to move westward. In the six- to 10-day period, strongly cold temperatures were still expected across most of the country, particularly in the Midwest.
Chilly early winter weather has helped to drive the front month up more than 25 percent since Nov. 1, with the contract posting a 2-1/2-year high of $4.532 on Dec. 23.
At 9:59 a.m. EST (1459 GMT), front-month February gas futures on the New York Mercantile Exchange, were down 9.8 cents, or nearly 2 percent, at $4.339 per million British thermal units after trading between $4.325 and $4.448.
In the ICE cash market, prices for Thursday delivery at Henry Hub GT-HH-IDX, the benchmark supply point in Louisiana, dipped 7 cents to $4.357, with early trade differentials 2 cents over NYMEX.
Gas on the Transco pipeline at the New York citygate E-TSCO6NY-IDX spiked $2.69 to $8.74 on cold temperatures in the northeast region.
(For daily ICE U.S. cash gas prices, click <0#GAS-IDX=ICE>)
The recent move-up in prices broke key technical resistance along the way and turned the chart picture bullish. But traders said the market was overbought and due for a profit-taking pullback as investors square books for the year.
Data released Friday by the U.S. Energy Information Administration showed that total gas inventories fell last week by 177 billion cubic feet to 3.071 trillion cubic feet. The report was delayed one day last week because of the Christmas holiday.
Analysts polled by Reuters expected this week’s storage report, coming on Friday, to reveal that withdrawal over the Christmas week fell between 119 and 162 billion cubic feet.
If drawdowns for the rest of the heating season match the five-year average pace, storage would end the winter below 1.5 tcf. That would be the lowest end-winter inventory since 2008 and could help prop up prices next year as utilities scramble to rebuild stocks for the next heating season.
Nuclear plant outages on Tuesday totaled 1,750 megawatts, or about 2 percent of U.S. capacity. That was down from Monday’s total of 2,100 MW, and well below the 11,030 MW out a year ago and the five-year average outage rate of 5,200 MW. (Reporting by Julia Edwards; Editing by Jeffrey Benkoe)