U.S. natgas futures edge higher ahead of long weekend
* Front month remains above recent 3-month low * Colder weather set to return this weekend, next week * Nuclear outages running well above normal levels * Coming Up: Baker Hughes gas drilling rig data Friday By Eileen Houlihan NEW YORK, Feb 15 (Reuters) - U.S. natural gas futures edged higher early on Friday, with cold weather set to return to consuming regions of the nation over the Presidents' Day holiday weekend and next week. In addition, some traders noted nuclear power plant outages remained well above normal, boosting near-term demand. But others said storage remains bloated and winter should be winding down over the next month, adding weight to the downside. As of 9:16 a.m. EST (1416 GMT), front-month March natural gas futures on the New York Mercantile Exchange were at $3.177 per million British thermal units, up 1.4 cents, or less than 1 percent. The front month contract tumbled more than 4 percent on Thursday, after the release of bearish weekly inventory data. The contract hit a 6-1/2 week high of $3.645 in late January after touching a more than a three-month low of $3.05 in early January. Forecaster MDA Weather Services called for an "unsettled, stormy pattern" with normal or below-normal readings over the nation in its one to five-day outlook. In its six to 10-day forecast, as well as the latest National Weather Service six to 10-day forecast issued on Thursday, both again called for normal or below-normal temperatures for the country. Nuclear outages totaled 14,100 megawatts, or 14 percent of U.S. capacity, flat to Thursday's outages, but up from 12,100 MW out a year ago and a five-year average outage rate of about 8,800 MW. ANOTHER BELOW AVERAGE STORAGE DRAW Data from the U.S. Energy Information Administration showed total domestic inventories fell last week by 157 billion cubic feet to 2.527 trillion cubic feet. Most traders viewed the report as bearish, noting the draw came in below Reuters poll estimates for a 162 bcf drop and under market expectations for a third straight week. While stocks are nearly 10 percent below last year's record levels, they are 16 percent above the five-year average level for this time of year. Early withdrawal estimates for next week's inventory report range from 118 bcf to 154 bcf, below the 155 bcf pulled from storage during the same week in 2012 and possibly below the five-year average decline for that week of 140 bcf. If drawdowns for the rest of winter match the five-year average pace, inventories will end March at 2.076 tcf, about 20 percent above normal but 16 percent below last year, when stocks finished a very mild heating season at a record high 2.48 tcf. DRILLING DECLINES, PRODUCTION FAILS TO SLOW Traders awaited the next Baker Hughes gas drilling rig report expected on Friday. Last week's data showed the gas-directed drilling rig count fell for the fourth time in five weeks, dropping by three to 425. But while the gas rig count is hovering not far above the 13-1/2-year low of 413 hit three months ago, production has shown no significant sign of slowing. Producers have curbed dry gas drilling but the associated gas produced by more profitable liquids-rich wells has kept gas flowing at or near a record pace.