U.S. natgas futures seesaw early after big losses on Thursday

Fri Jun 7, 2013 9:40am EDT

Related Topics

* Front month tumbled more than 4 percent Thursday
    * Weather forecasts mixed through mid- to late June
    * Nuclear power plant outages back below normal
    * Coming up: Baker Hughes gas drilling rig data Friday

    By Eileen Houlihan
    NEW YORK, June 7 (Reuters) - U.S. natural gas futures
seesawed on either side of unchanged territory early on Friday,
with fairly mild weather forecasts and below-normal nuclear
power plant outages expected to do little to lift prices after
Thursday's big 4-percent drop.
    Front-month gas futures tumbled on Thursday after weekly
government storage data showed a much larger-than-expected build
to inventories.
    In addition, the season's first tropical storm, Andrea, had
moved ashore over the Southeast by Friday after failing to
disrupt any offshore gas production. Heavy rains from the system
were expected to further dampen demand in the region.
    As of 9:16 a.m. EDT (1316 GMT), front-month July natural gas
futures on the New York Mercantile Exchange were at
$3.834 per million British thermal units, up 0.7 cent, after
trading between a nearly three-month low of $3.814 and $3.869.
    The contract hit a 21-month high of $4.444 just over a month
ago.
    The latest National Weather Service six- to 10-day forecast
issued on Thursday called for normal or below-normal
temperatures in most of the eastern half of the nation and in
some western states, with a large swatch of above-normal
readings across the Southwest and Texas.
    Nuclear plant outages totaled 11,200 megawatts, or 11
percent of U.S. capacity, down from 11,900 MW out on Thursday,
16,600 MW out a year ago and a five-year average outage rate of
11,600 MW. 
    Data Thursday from the U.S. Energy Information
Administration showed total domestic gas inventories rose last
week by 111 billion cubic feet, above Reuters poll estimates for
a 95-bcf gain as well as the five-year average build for that
week of 92 bcf. 
    Stocks at 2.252 trillion cubic feet, however, are still
nearly 22 percent below year-ago levels and 3 percent below the
five-year average level.
    (Storage graphic: link.reuters.com/mup44s)
    Early injection estimates for next week's EIA report range
from 83 bcf to 107 bcf versus a 66-bcf build during the same
week last year and a five-year average rise for that week of 84
bcf.    
    Traders were waiting for the next Baker Hughes 
drilling rig report to be released on Friday. Last week's data
showed the gas-directed rig count was still hovering just above
an 18-year low.
    (Rig graphic: link.reuters.com/nuz86t)
    

 (Editing by Sofina Mirza-Reid)
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