(Adds prices to close, change in market movement)
NEW YORK Jan 3 U.S. natural gas futures closed
down after fluctuating on Friday, as high winter heating demand
was countered by a smaller than expected drop in stockpiles last
Natural gas stocks fell by 97 billion cubic feet during the
week ending Dec. 27, according data from the Energy Information
Administration released Friday morning, smaller than the 126
draw forecast in a Reuters poll.
The fall was smaller than the 126 bcf drop during the same
week in 2012 and the five year average of 121 bcf.
Continued cold winter weather helped bolster futures, which
rebounded into the positive by midday.
Front-month February gas futures on the New York Mercantile
Exchange, dropped less than 2 cents to $4.304 per million
British thermal units, rebounding from losses earlier of more
than 2 percent.
"The weather forecast for the latter half of January doesn't
look supportive, and we could see some more pressure, but I
don't think the market is going to get aggressively short with
this much winter left," said Gene McGillian, analyst at
Tradition Energy in Stamford Connecticut.
In the ICE cash market, prices for weekend delivery at Henry
Hub GT-HH-IDX, the benchmark supply point in Louisiana, rose 1
cent to $4.34, with late trade differentials at less than a 1
cent premium over NYMEX, the same as Thursday's premium.
Gas on the Transco pipeline at the New York citygate
E-TSCO6NY-IDX fell 17.51 cents, recovering from supply
constraints caused by a forecast for a cold snap in the region,
to $13.61. In Chicago, gas at citygate MC-CHICIT-IDX rose
$8.34 to $13.19.
(For daily ICE U.S. cash gas prices, click <0#GAS-IDX=ICE>)
Private forecaster MDA Weather Services called for cold,
stormy weather to continue in the 1- to 5-day range, but
moderate temperatures are expected in the 6- to 10-day range,
followed by strong warmth in the East in the 11- to 15-day
Sub-zero temperatures accompanied a snow storm that has made
its way through much of the Midwest and the Northeast in the
second half of the week, causing some pipelines to reach
capacity. Gas on the Transco pipeline at the New York citygate
E-TSCO6NY-IDX was up $15.72 to $31.12 on Thursday.
Chilly early winter weather drove the front month contract
up to finish last year with a 27 percent gain, making it the
biggest gaining commodity of the year. The contract posted a
2-1/2-year high of $4.532 per million British thermal units on
Last Friday's storage report from the U.S. Energy
Information Administration showed total gas inventories fell the
week ending Dec. 20 by 177 billion cubic feet to 3.071 trillion
cubic feet. The report was delayed one day last week by the
Nuclear plant outages on Friday totaled 1,540 megawatts, or
about 2 percent of U.S. capacity. That was down from Thursday's
total of 1,600 MW, and well below the 7,500 MW out a year ago
and the five-year average outage rate of 4,750 MW.
(Reporting by Julia Edwards; Editing by Bernadette Baum,
Meredith Mazzilli, Chris Reese and Andrew Hay)