NEW YORK, Feb 28 U.S. natural gas futures held
slim gains early Thursday, underpinned by light buying ahead of
what should be a bullish weekly inventory report this morning
though the milder change in extended weather forecasts helped
limit the upside.
Cold forecasts helped drive the front contract up nearly 10
percent over the last two weeks, with the market also garnering
support from utilities switching from coal to cheaper gas to
generate power and hefty nuclear plant outages that should
translate into more gas burn.
Gas-fired units are typically used to offset any shut
nuclear generation if the weather is cold or hot enough to
require replacement power.
But the moderating trend in weather forecasts at midweek
stirred concerns that late winter demand will slow and limit
potential upside in prices, particularly with inventories still
high and production flowing at or near a record peak.
At 9:15 a.m. EST (1415 GMT), front-month gas futures
on the New York Mercantile Exchange were up 0.6 cent at $3.44
per million British thermal units, after trading between $3.395
While the recent run up in prices broke some key moving
average and trendline resistance points and turned the chart
picture more supportive, technical traders said Wednesday's weak
front-month close after climbing intraday to a five-week high of
$3.554 cast doubt about further upside.
Most chart watchers would need a close at least above this
year's high of $3.645 to turn more positive on prices.
MDA Weather Services, a private forecaster, noted that both
the six-to-10-day and 11-to-15-day outlooks turned a bit warmer
overnight though another shot of cold air was expected to hit
the Midwest late in the period.