NEW YORK Jan 14 U.S. natural gas futures continued to rise on Tuesday, extending gains after rising nearly 5.5 percent Monday on forecasts calling for mid-winter cold that could lead to heavy draws on storage.
MDA Weather Services revised its forecast to predict colder weather than previously expected over the 11- to 15-day range in the eastern two-thirds of the country.
"It looks like storage levels could fall well below 1.5 trillion cubic feet due to the colder-than-expected temperatures and increasing industrial demand," said Addison Armstrong, senior director of market research at Tradition Energy.
Front-month natural gas futures on the New York Mercantile Exchange rose 5.9 cents, or 1.38 percent, to $4.333 per million British thermal units at 09:40AM EST (14:40GMT).
In the ICE cash market, gas for Wednesday delivery at Henry Hub GT-HH-IDX, the benchmark supply point in Louisiana, rose 16 cents to $4.35. Early trade differentials were at a 2-cent premium over NYMEX, strengthening from Monday's 8-cent discount.
Gas on the Transco pipeline at the New York citygate E-TSCO6NY-IDX had not yet traded early Tuesday.
Early estimates for the weekly storage draw for the week ending Jan. 10 range from 278 billion cubic feet (bcf) to 339 bcf, which at the high end would top the 285 bcf record draw set in December.
EIA will release the weekly storage inventory report for this week on Thursday.
Last week, the EIA report showed weekly storage levels fell 157 bcf to 2.817 trillion cubic feet.
The number of rigs drilling for natural gas in the U.S. fell by 15 to 357 rigs this week, data from Baker Hughes showed on Friday. The count, however, remains above the 18-year low of 349 rigs hit in late June 2013.
In U.S. nuclear news, there were about 2,800 megawatts out on Monday, versus 3,100 MW on Monday. That compares with 8,400 MW out a year ago and a five-year average out of 5,700 MW. (Reporting by Scott DiSavino and Julia Edwards; Editing by Meredith Mazzilli)