* Front month remains well above recent 3-month low
* Forecasters expecting some cold weather could linger
* Nuclear outages running above normal levels
* Coming Up: EIA natgas storage data Thursday
By Eileen Houlihan
NEW YORK, Feb 6 U.S. natural gas futures rose
for a third straight day early Wednesday, lifted by lingering
cold weather in the eastern half of the country that has boosted
Thomson Reuters Natural Gas Analytics data showed heating
degree days turned quite a bit colder overnight in most areas,
the greatest increase in the Northeast where demand went up by
more than forty degree days compared to late computer runs on
Degree days are a measure of departure in the mean daily
temperature from 65 degrees Fahrenheit (18 degrees Celsius) and
are used to estimate demand to heat or cool homes and
As of 9:25 a.m. EST (1425 GMT), front-month March natural
gas futures on the New York Mercantile Exchange were at
$3.442 per million British thermal units, up 4.3 cents, or more
than 1 percent.
The front month contract hit a 6-1/2 week high of $3.645 two
weeks ago after hitting a more than three-month low of $3.05 in
The latest National Weather Service six- to 10-day forecast
issued on Tuesday trimmed the above-normal reading area to just
the eastern third of the nation, with below-normal temperatures
across the West and some normal readings in the mid-continent.
Nuclear outages totaled 8,600 megawatts, or 9 percent of
U.S. capacity, up from 8,500 MW out on Tuesday and a five-year
average outage rate of about 8,200 MW, but below the year-ago
outages of about 11,000 MW.
STORAGE DRAW FALLS SHORT OF EXPECTATIONS
Last week's storage report from the U.S. Energy Information
Administration showed domestic gas inventories fell the prior
week by 194 billion cubic feet, below industry expectations for
a 206-bcf draw.
Most traders viewed the decline as bearish, noting it was
below market expectations for the first time in five weeks.
But others noted the draw was above the year-ago drop of 149
bcf and the five-year average draw of 178 bcf.
Storage now stands 202 bcf, or about 7 percent, below last
year's record high levels, but 304 bcf, or more than 12 percent,
above the five year-average.
Withdrawal estimates for Thursday's inventory report so far
range from 125 bcf to 158 bcf, well above the 94 bcf pulled from
storage during the same week in 2012, but in line with the
five-year average decline for that week of 165 bcf.
If drawdowns for the rest of winter match the five-year
average, inventories will end March at 2.032 tcf, about 18
percent above normal but 18 percent below last year, when stocks
finished a very mild heating season at a record-high 2.48 tcf.
GAS RIG COUNT FALLS, OUTPUT STILL NEAR RECORD
Baker Hughes data last week showed the gas-directed
drilling rig count fell for the third time in four weeks,
dropping by six to 428.
While the gas rig count is hovering not far above the
13-1/2 year low of 413 hit about three months ago, production
has shown no significant sign of slowing.
EIA estimates that marketed gas output in 2013 will hit a
record high for the third straight year.