UPDATE 2-U.S. natgas futures up nearly 4 pct as colder weather expected
NEW YORK Jan 28 (Reuters) - U.S. natural gas futures for February rose nearly 4 percent on Tuesday as forecasts for the coming days turned colder.
Private forecaster MDA Weather Services revised its six-to-10-day forecast to show colder-than-average temperatures for all of the country except Florida. It had previously expected warmer temperatures to spread from Texas to Maine.
Front-month futures have been extremely volatile over the past week, gaining more than 10 percent on Friday and falling more than 5 percent on Monday.
Implied volatility over the last 30 days reached 83 on Friday, the highest since September 2009. On Monday, it fell to 69, still within levels not seen since 2009.
Price swings are likely to temper if weather forecasts become more certain and moderate.
"Robust production levels of gas and uncertainty surrounding the weather outlook for the second half of this winter should provide growing resistance to rising gas prices, especially if forecasts moderate in the coming weeks," said Addison Armstrong, senior director of market research at Tradition Energy.
Front-month natural gas futures on the New York Mercantile Exchange closed up 18.6 cents, or 3.84 percent, at $5.033 per million British thermal units.
On Monday, the contract reached $5.442 per mmBtu, its highest since February 2010.
The front-month, which expires on Wednesday, is up about 19 percent since the beginning of January.
In the ICE cash market, trades for gas for Wednesday delivery at Henry Hub , the benchmark supply point in Louisiana, closed at $5.23, down 46 cents from Monday, when prices reached their highest since 2010. Late trade differentials were done at a 20-cent premium over the NYMEX price.
Sabine Pipeline said Tuesday morning it would begin repairs to the South Booster Station at the Henry Hub, reducing compression capabilities by 40 percent. The company could not say whether they would affect overall capacity or how long they would take.
Gas on New York's Transco Zone 6 pipeline closed down $61.06 to $30.20, as the region is forecast to gradually warm up over the week.
In Chicago, gas for Wednesday delivery came off record highs as weather is expected to warm up from Tuesday's sub-zero temperatures. Trades on the Chicago Citygate pipeline slumped $34.74 to $6.57.
Storage withdrawals for the week ended Jan. 24 are expected to be between 220 billion and 280 billion cubic feet, according to analysts polled by Reuters. The U.S. Energy Information Administration will release the data on Thursday.
Nuclear plant outages, which create a draw on natural gas as a substitute power source, were at about 2,600 megawatts on Tuesday, equal to those on Monday. That compares with 9,050 MW out a year ago and a five-year average outage rate of 5,800 MW.
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