UPDATE 3-US gas futures rise near 3 pct on big EIA storage draw
* Front month remains above Wednesday's 3-month spot low * Long-term outlooks call for mostly mild weather * Weekly inventory draw larger-than-expected By Eileen Houlihan NEW YORK, Jan 4 (Reuters) - U.S. natural gas futures rose nearly 3 percent on Friday, gaining for the first time in four sessions after government storage data showed a larger-than-expected drawdown from winter inventories. "Today's natural gas inventory report was biased to the bullish side from the perspective that it showed a net withdrawal greater than most of the consensus forecasts as well as both last year's draw and the net withdrawal for the five year average for the same week," said Energy Management Institute's Dominick Chirichella. Front-month February natural gas futures on the New York Mercantile Exchange rose 8.9 cents, or just under 3 percent, to settle at $3.287 per million British thermal units. The contract rose as high as $3.299 after data from the U.S. Energy Information Administration showed gas inventories fell last week by 135 billion cubic feet, above industry expectations for a 127 bcf draw. But despite the big draw, traders said storage still 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. With fairly mild weather on tap for the next few weeks, traders expect the upside to be limited unless some sustained cold arrives to boost heating loads and further draw down storage. The latest National Weather Service six-to-10-day forecast issued on Thursday again called for above-normal temperatures for the eastern half of the U.S., with below-normal readings for most of the western half. Other months also gained on Friday, with the March contract rising 8.9 cents to $3.30 and summer months rising about 8 cents each. In the cash market, weekend gas for delivery at the NYMEX benchmark Henry Hub in Louisiana rose 1 cent on average to $3.20. Late deals eased to 6 cents under the front-month contract, from deals done late Thursday at a 3-cent discount. Gas on the Transco pipeline at the New York citygate fell more than $1 to average $4.83. Nuclear outages totaled just 7,500 megawatts, or 7 percent, of U.S. capacity, even with outages on Thursday, but up from 4,300 MW out a year ago and a five-year average outage rate of about 5,000 MW. WINTER STORAGE STILL BLOATED 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. Early withdrawal estimates for next week's EIA storage report range from 155 bcf to 176 bcf versus a 137-bcf decline during the same year-ago week and a five-year average draw for that week of about 165 bcf. RIGS GAIN, OUTPUT STILL NEAR RECORD Baker Hughes data on Friday 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. The gas rig count is hovering above a 13-1/2-year low of 413 hit eight weeks ago, but so far production has not shown any significant sign of slowing. The EIA expects gas output in 2013 to rise to a record high of 69.59 bcf per day, the third straight annual record.
- Sunken Korea ferry relatives give DNA swabs to help identify dead |
- Special Report: How the U.S. made its Putin problem worse
- Vice-principal of South Korea school in ferry disaster commits suicide |
- Japan expands army footprint for first time in 40 years, risks angering China
- Mediator heads to east Ukraine, seeking surrenders |