UPDATE 3-U.S. natgas futures end down 2 pct in quiet post-holiday trade
* Front month remains above recent four-month spot low * Above-normal temperatures expected on both coasts * Nuclear plant outages continue above average By Eileen Houlihan NEW YORK, July 5 (Reuters) - U.S. natural gas futures slid 2 percent on Friday in quiet post-holiday trade, pressured by milder weather in the mid-continent and healthy inventories. The slide came despite above-normal nuclear plant outages and high temperatures that are expected to boost demand for air conditioning in the Northeast over the next several days. "The natural gas market is back on the downswing, with traders taking a second crack at asserting this week's storage build and the outlook for above-average storage injections in the weeks ahead," said Citi Futures energy analyst Tim Evans. Evans said the weather outlook had become somewhat warmer and more supportive, adding that it was not clear if prices would continue lower, depending on new forecasts due Monday. Many offices remained shut on Friday or had skeleton crews after closing on Thursday for the U.S. Independence Day holiday. A slew of 90 degree (Fahrenheit) temperatures were expected for key East Coast cities over the next few days, with humidity levels making it feel more like more than 100 degrees F, forecasters said. But front-month August natural gas futures on the New York Mercantile Exchange fell 7.3 cents, or just under 2 percent, to settle at $3.617 per million British thermal units. The nearby contract traded between $3.577 and $3.699 in its only losing session of the holiday-shortened week. It rose about 1.5 percent for the week, remaining above the nearly four-month low of $3.526 hit a week ago. Other months ended lower as well on Friday, with the September contract losing 7.1 cents, also about 2 percent, to $3.618, and winter months down about 6 cents each. In the cash market, gas for delivery through Monday at the NYMEX benchmark, Henry Hub in Louisiana, slid 2 cents to $3.52. Late deals, however, firmed to 3 cents under the front-month contract, compared with deals done late Wednesday at a 12-cent discount. Gas on the Transco pipeline at the New York citygate rose 15 cents on the day to $3.80, boosted by the upcoming heat. The latest National Weather Service six- to 10-day forecast, issued on Thursday, called for above-normal temperatures in about the western third of the nation and along much of the East Coast, with normal or below-normal readings in the middle of the nation. Wednesday's gas storage report from the U.S. Energy Information Administration, issued a day early this week due to the holiday on Thursday, showed total domestic inventories rose last week by 72 billion cubic feet, in line with Reuters poll estimates for a 71 bcf build and the five-year average build of 71 bcf for that week. Total gas inventories at 2.605 trillion cubic feet are about 16 percent below last year's record high level, but only 1 percent below the five-year average level. Early injection estimates for next week's storage report range from 82 bcf to 102 bcf, versus a 34 bcf build during the same week last year and a five-year average increase for that week of 74 bcf. Nuclear plant outages on Friday totaled 5,800 megawatts, or 6 percent of U.S. capacity, even with Wednesday's outages, down from 9,300 MW out a year ago, but up from a five-year average outage rate of 4,900 MW. Baker Hughes data on Wednesday, also issued early this week due to the holiday, showed the gas drilling rig count rose for a second straight week, gaining 2 to 355, after posting an 18-year low of 349 three weeks ago.
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