U.S. natural gas futures pull back slightly ahead of weekend
NEW YORK, Aug 23 (Reuters) - U.S. natural gas futures eased lower early on Friday as prices pulled back ahead of milder weekend weather despite forecasts for warmer weather in the Northeast and Midwest for next week that should force homeowners and businesses to crank up their air conditioners. Front-month futures, backed by a bullish weekly inventory report and the outlook for warmer weather, had gained 5.3 percent in the previous four sessions, breaking some key resistance along the way. But some technical traders said the market was overbought and due for a pullback. At 9:10 a.m. EDT (1310 GMT), front-month gas futures on the New York Mercantile Exchange were down 3.3 cents, or 0.9 percent, at $3.512 per million British thermal units, after climbing overnight to a four-week high of $3.562. Most traders viewed Thursday's 57 billion cubic feet weekly inventory build as bullish for prices, noting it came in well below the Reuters poll estimate of 69 bcf and below the lowest estimate in that poll of 61 bcf. But many traders remain skeptical about recent gains, with inventories above normal, production flowing at or near record levels, and summer temperatures likely to wind down soon. After a fairly mild weekend, forecaster Commodity Weather Group noted that the six- to 10-day outlook again turned warmer, particularly for the Midwest, with temperatures at times expected to climb near 90 degrees Fahrenheit. The U.S. Energy Information Administration report showed that total domestic gas inventories last week stood at 3.063 trillion cubic feet, about 1.5 percent above average. Early injection estimates for next week's report range from 53 bcf to 79 bcf. Stocks gained 64 bcf during the same year-ago week. The five-year average increase for that week is 66 bcf. Traders were waiting for the next Baker Hughes drilling rig report on Friday. Recent gains in gas drilling have stirred concerns that new investment in gas pipelines, and processing plants are allowing producers to hook up more wells and pump even more supply into an already well-supplied market. The EIA still expects U.S. gas production in 2013 to hit a record high for a third straight year. Nuclear plant outages on Friday totaled 2,944 megawatts, or 3 percent of U.S. capacity, versus 1,528 MW out on Thursday, 8,302 MW out a year ago and a 5-year average outage rate of 5,111 MW.
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