* Early-week heat in Northeast, Midwest seen moderating
* Milder trend late this week, next week pressures prices
* Coming up: Reuters weekly natgas inventory poll Wednesday
By Joe Silha
NEW YORK, June 25 U.S. natural gas futures ended
lower on Tuesday for a fourth straight session, with the front
contract pressured to a 3-1/2-month low by milder weather
forecasts for later this week and next week that should slow
Despite heat in the Northeast and Midwest early this week,
front-month gas futures have fallen 8 percent in the last four
trading days amid signs that the extended weather outlook is
"The weather is looking cooler than normal for the eastern
half (of the country) through mid-July. The move lower today
pretty much destroys technical support at $3.71 and could open
an opportunity for prices to go lower," Gelber & Associates
analyst Aaron Calder told Reuters.
Front-month July gas futures on the New York
Mercantile Exchange, which expire on Wednesday, ended down 9.2
cents, or 2.5 percent, at $3.647 per million British thermal
units after slipping late to $3.645, the lowest price for the
nearby contract since mid-March.
Technical traders agreed Tuesday's weak close below key
support could send prices lower, but some noted the market was
overbought and due for a short-covering bounce, possibly ahead
of Thursday's weekly government inventory report.
But many traders remained skeptical of the upside without a
sustained, broad-based heat wave, particularly with inventories
comfortable and gas production still at or near a record high.
While heat is forecast to continue in the West for the next
two weeks, MDA Weather Services expects near-seasonal or
below-seasonal temperatures to dominate the eastern half of the
nation during the six-to-15-day time frame.
The Baker Hughes gas drilling rig count fell to
another 18-year low last week, but U.S. gas production has not
slowed much, if at all, this year.
The Energy Information Administration still expects gas
output in 2013 to post a record high for a third straight year.
Injection estimates for Thursday's EIA storage report range
from 84 bcf to 95 bcf, with most estimates in the high-80s. That
would be well above the 58-bcf build seen during the same week
last year and the five-year average rise for that week of 79