NEW YORK, Dec 30 (Reuters) - U.S. natural gas futures rose by more than 2 percent early Monday on forecasts for colder-than-average temperatures over most of the country in the first two weeks of 2014.
Chilly early winter weather has helped drive the front month up more than 25 percent since Nov. 1, with the contract posting a 2-1/2 year high of $4.532 last Monday.
MDA Weather Services modified its forecast in the six- to 10-day outlook to be substantially colder than previously expected. Some moderation is expected in the 11- to 15-day time frame.
At 9:26 a.m. EST (1426 GMT), front-month February gas futures on the New York Mercantile Exchange, were up 9.5 cents, or 2.2 percent, at $4.463 per million British thermal units after trading between $4.403 and $4.472.
The recent move up in prices broke some key technical resistance along the way and turned the chart picture bullish. But some traders said the market was overbought and due for a profit-taking pullback as investors square books for the year.
Data released Friday by the U.S. Energy Information Administration showed that total gas inventories fell last week by 177 billion cubic feet to 3.071 trillion cubic feet. The report was delayed one day last week because of the Christmas holiday.
Many traders viewed the drop as neutral for prices, noting it matched the Reuters poll estimate of 177 bcf. But some saw it as supportive, coming in well above last year’s draw of 74 bcf and the five-year average decline for that week of 125 bcf.
If drawdowns for the rest of the heating season match the five-year average pace, storage would end winter below 1.5 tcf. That would be the lowest end-winter inventory since 2008 and could help prop up prices next year as utilities scramble to rebuild stocks for next heating season.
Nuclear plant outages on Monday totaled 2,100 megawatts or about 2 percent of U.S. capacity. That was down from Friday’s total of 1,734 MW, and well below the 10,500 MW out a year ago and the five-year average outage rate of 5,200 MW. (Reporting By Joe Silha and Julia Edwards; Editing by Meredith Mazzilli)