U.S. natgas futures surge 2 pct to more than 20-month high
* Front month at highest mark since late July 2011 * Cold weather back on tap in consuming regions * Power plant outages remain strong * Coming Up: Baker Hughes gas drilling rig data Friday By Eileen Houlihan NEW YORK, April 12 (Reuters) - U.S. natural gas futures rose nearly 2 percent early on Friday, lifted to their highest mark in more than 20 months amid a tightening supply picture and more cold weather returning to consuming regions of the nation late this week. In addition a slew of spring power plant outages were helping to keep demand for gas-fired generation firm. Gas futures are up about 36 percent since mid-February, lifted by cold late-winter weather that put a huge dent in inventories, above-average nuclear power plant outages and stronger price expectations. But most traders expect more upside to be difficult, with spring-like weather expected by late-month seen easing heating demand before summer cooling demand begins. As of 9:24 a.m. EDT (1324 GMT), front-month May natural gas futures on the New York Mercantile Exchange were at $4.202 per million British thermal units, up 6.3 cents, or nearly 2 percent. The contract rose as high as $4.24 in electronic trade, the highest mark for a nearby contact since late July, 2011. After some cold in the Midwest over the next few days, the latest National Weather Service six to 10-day forecast issued on Thursday called for more below-normal readings in the mid-Continent and above-normal readings in the Southeast and Southwest. Nuclear outages totaled 22,300 megawatts, or 22 percent of U.S. capacity, up from 21,900 MW out on Thursday, but down from 25,200 MW out a year ago and a five-year average outage rate of 22,900 MW. INVENTORY DRAW BELOW EXPECTATIONS, ABOVE AVERAGE Thursday's gas storage report from the U.S. Energy Information Administration showed domestic inventories fell last week by 14 bcf, below Reuters poll estimates for a 21 bcf draw, but above the year-ago gain of 11 bcf and the five-year average build of 15 bcf for that week. Domestic gas inventories of 1.673 trillion cubic feet are nearly 33 percent below last year's record high and nearly 4 percent below the five-year average. Gas inventories started the heating season at record highs, but last week's data showed stocks slid below the five-year norm for the first time since September 2011. This week's decline should be the last of the heating season, with estimates for next week's report all looking for a modest build. Early injection estimates for next week's report range from 16 bcf to 55 bcf versus a 21-bcf build during the same week last year and a five-year average rise for that week of 39 bcf. Total gas pulled from storage this winter is about 2.25 tcf, roughly 770 bcf, or 52 percent, more than last year and about 15 percent more than the normal heating-season draw. Traders were waiting for the next Baker Hughes gas drilling rig report to be released later Friday. Data last week showed the gas-directed drilling rig count fell 14 to a 14-year low of 375.
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