* Front futures rebound for a third straight day
* Moderate weather not seen stirring much demand
* Coming Up: EIA, Enerdata natgas storage data on Thursday
By Joe Silha
NEW YORK, May 15 U.S. natural gas futures edged
higher on Wednesday for a third straight day, backed by warmer
forecasts for the Midwest and East and some technical buying and
book squaring after prices lost ground in the previous three
Milder late April and early May weather helped drive gas
prices down more than 11 percent in the last few weeks, but
prices have bounced back by about 4.1 percent so far this week.
Chart traders said short sellers may be covering this week,
noting prices seem to have found a bottom after testing and
holding technical support in the $3.90 per mmBtu area several
times over the last week or so.
But they noted that futures volume has been light this week,
averaging less than 275,000 contracts per day in the last three
sessions, well below the 30-day average volume of about 400,000
lots per day and the 250-day average of about 372,000 contracts.
The lack of activity is likely keeping buyers cautious,
knowing there is not much upside momentum backing recent gains.
"The market is creeping back up after the recent sell-off,
but we're not seeing a lot of heat in Texas, which is a big gas
user, and it doesn't feel like there's a whole lot of enthusiasm
behind the move," a New York-based trader said.
Front-month gas futures on the New York Mercantile
Exchange ended up 4.6 cents, or 1.1 percent, at $4.07 per
million British thermal units after trading between $4.011 and
$4.078. The front contract hit a 21-month high of $4.444 two
weeks ago, then posted a five-week low of $3.883 last week.
Traders noted the June-January carry widened for the first
time in six sessions, edging up 0.4 cent to 38.2 cents.
After a cool start to the week, some traders said that
warmer weather moving into the Midwest and East at midweek may
be backing some of the buying.
But many traders remained skeptical of the upside, at least
until hotter weather arrives and forces homeowners and
businesses to crank up air conditioners.
AccuWeather.com expects temperatures in the Northeast and
Midwest to range from normal to slightly above normal for the
next week, but traders noted that high readings mostly in the
70s Fahrenheit were not likely to generate much heating or
Traders and analysts polled by Reuters are expecting another
slightly bearish inventory report when the U.S. Energy
Information Administration releases its weekly data on Thursday.
Most estimate that storage rose last week by 95 billion
cubic feet. That would be well above the 56 bcf injection during
the same week last year and the five-year average increase for
that week of 83 bcf.