UPDATE 3-US gas futures end down on profit-taking from 6-wk high
* Front month well above recent 3-month spot low * Support from above-normal nuclear outages, near-term cold * Record production, long-term mild weather limit gains By Eileen Houlihan NEW YORK, Jan 22 (Reuters) - U.S. natural gas futures ended lower for the first time in four sessions and just the second time in eight sessions on Tuesday, pressured by some profit-taking after a 15 percent run-up to a six-week spot chart high. While cold near-term weather and above-normal nuclear power plant outages have supported prices the past two weeks, milder weather on tap in long-term outlooks, record high production and bloated inventories are likely to limit more gains, traders said. "The natural gas market is backing off from higher levels in anticipation of a warming trend, with temperatures at a possible seasonal low this week," said Citi Futures energy specialist Tim Evans. "The overall temperature outlook seems more likely to produce choppy trade in the middle portion of the recent trading range rather than a sustained move in either direction." Front-month February natural gas futures on the New York Mercantile Exchange slid 0.8 cent to settle at $3.558 per million British thermal units. The contract rose as high as $3.645 in electronic trading, the highest mark for a front month since early December. It also fell to $3.05 in early January, a contract low and the lowest mark for a front-month contract since late September. Other months ended slightly lower as well, with the March contract losing 0.7 cent to finish at $3.558 and summer months off about 0.1 cent each. NYMEX floor trading and other financial markets were closed on Monday for the U.S. Martin Luther King holiday. In the cash market, gas for delivery Wednesday at the NYMEX benchmark Henry Hub in Louisiana rose 9 cents on average to a two-month high of $3.63. With the cold centered in the Northeast, gas on the Transco pipeline at the New York citygate jumped $7.25 on average to $23.10, its highest price in five years. Forecaster MDA Weather Services called for far-below-normal temperatures for most of the eastern half of the nation in its one- to five-day outlook, but the forecast switched to above-normal readings for the East in its six- to 10-day outlook. The latest National Weather Service six- to-10-day forecast issued on Monday agreed, with above-normal readings stretching across the eastern third of the nation and across the South through Texas, with normal or below-normal temperatures confined to the West. Nuclear outages totaled 10,600 megawatts, or 11 percent of U.S. capacity, up from 9,100 MW out on Friday, 9,500 MW out a year ago, and a five-year average outage rate of about 8,400 MW. ANOTHER BIG STORAGE DRAW, BUT STOCKS ABOVE AVERAGE Last week's gas storage report from the U.S. Energy Information Administration showed inventories fell the prior week by 148 billion cubic feet, above industry expectations for a 136-bcf draw. Declines have beat industry expectations for the past three weeks, with the data reflecting what could be some permanent underlying growth in demand this year as utilities switch from coal to cheaper gas for power generation. Despite the large draws, storage remains at 3.168 trillion cubic feet, about 4 percent below year-earlier levels, but more than 11 percent above the five-year average. Inventories started the heating season in early November at 3.929 tcf, the fourth straight year in which they have headed into the heating season at a record peak. Early withdrawal estimates for this week's storage report range from 122 bcf to 181 bcf versus 162 bcf pulled from inventory during the same week last year and the five-year average decline for that week of 176 bcf. RIGS SLIDE, BUT OUTPUT NEAR RECORD Baker Hughes data on Friday showed the gas-directed rig count had fallen by five to 429, its second straight weekly loss. Drilling for natural gas has mostly declined for more than a year, with gas rigs down 54 percent since peaking at 936 in October 2011. But the EIA also said recently that it expected gas output in 2013 to rise to 69.84 bcf per day, the third straight annual record.
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