U.S. natgas futures edge lower on continued mild weather

Wed Jul 24, 2013 8:46am EDT

Related Topics

* Seasonal or below-seasonal temperatures for Northeast,
Midwest
    * Nuclear plant outages remain well below normal
    * Tropical Depression near Cape Verde Islands - National
Hurricane Center
    * Coming Up: EIA natgas storage data on Thursday

    By Eileen Houlihan
    NEW YORK, July 24 (Reuters) - U.S. natural gas futures edged
lower early on Wednesday, as continued mild weather in consuming
regions of the nation this week and next were seen curbing power
demand.
    "Overall the latest forecasts suggest that the call on
natural gas for weather-related demand for power generation is
likely to be below normal for this time of the year," said
Energy Management Institute partner, Dominick Chirichella.
    In addition, below-average nuclear power plant outages were
adding more weight to the downside.
    But traders noted the newly formed tropical depression near
the Cape Verde Islands was expected to move into the Caribbean
early next week. It was still too early to gauge whether the
system would move into the Gulf of Mexico and disrupt offshore
energy production.
    As of 8:34 a.m. EDT (1234 GMT), front-month August natural
gas futures on the New York Mercantile Exchange were at
$3.708 per million British thermal units, down 3.5 cents, or
near 1 percent.
    The contract rose nearly 2 percent on Tuesday, remaining
below the four-week high of $3.835 hit late last week, after
sliding to a nearly four-month low of $3.526 in late June.
    Forecaster MDA Weather Services called for widespread below
normal temperatures in the Midwest in its one- to five-day
forecast, with mostly seasonal readings in the East in the six-
to 10-day period.
     Last week's gas storage report from the U.S. Energy
Information Administration showed total domestic inventories
rose in the prior week by 58 billion cubic feet to 2.745
trillion cubic feet, about 13 percent below last year's
record-high level but only 1 percent below the five-year
average. 
    Early injection estimates for Thursday's EIA report range
from 33 bcf to 60 bcf, compared with a 26 bcf build in the same
week last year and a five-year average increase for that week of
53 bcf.
    
    Nuclear plant outages on Wednesday totaled 2,100 megawatts,
or just 2 percent of U.S. capacity, down from 2,500 MW out on
Tuesday, 9,400 MW out a year ago and a five-year average outage
rate of about 5,000 MW. 
    

 (Editing by Sofina Mirza-Reid)
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