October 14, 2013 / 4:10 PM / 4 years ago

UPDATE 3-U.S. natgas futures end higher for third session, hit 4-mth high

* Cooler weather on tap for later this month

* Prices remain above key technical resistance levels

* No weekly EIA inventory report due to government shutdown (Updates prices to settlement, changes analyst quote)

By Eileen Houlihan

NEW YORK, Oct 14 (Reuters) - U.S. natural gas futures ended higher for a third straight session on Monday, after rising to a near four-month high, on more technical buying and short covering ahead of cooler weather forecast for late this month.

“The short-term weather forecasts have become a tad more supportive over the last several days, showing about 75 percent of the U.S. expecting below-normal to normal temperatures from Oct. 19 to Oct. 27,” said Energy Management Institute partner Dominick Chirichella.

“There is likely to be some heating-related demand especially in the mid-section of the country, but whether or not it will result in a significant impact on gas going into inventory is still a question,” Chirichella added, noting the U.S. Energy Information Administration would not release weekly inventory data this week due to the government shutdown.

Technical buying, cooler trending weather outlooks and offshore Gulf of Mexico production cuts from Tropical Storm Karen helped push the contract up nearly 8 percent last week.

The onset of autumn nuclear plant outages has also spurred some near-term demand for gas-fired replacement power.

But some traders expect further upside to be limited, with healthy inventories and a fairly quiet tropical front seen capping more gains.

Front-month November natural gas futures on the New York Mercantile Exchange rose 4.4 cents, or 1.17 percent, to settle at $3.82 per million British thermal units.

The contract traded as high as $3.855, the highest price for a front-month contract since late June.

Prices remain above key technical resistance at the 100-day and 200-day moving averages.

The nearby contract hit a five-week low of $3.402 in late September.

Other months ended higher as well on Monday, with the December contract up 3.7 cents, or just under 1 percent, at $3.966 and winter months rising about 4 cents each.

In the cash market, gas for Tuesday delivery at the NYMEX benchmark, Henry Hub GT-HH-IDX in Louisiana, rose 8 cents to$3.80. Late deals were done at about 3 cents over the front-month contract, firming from deals done late Friday at a 4-cent discount.

Gas on the Transco pipeline at the New York citygate E-TSCO6NY-IDX gained 10 cents to $3.52, while Chicago gas MC-CHICIT-IDX was 14 cents higher on the day at $3.87.

For more ICE U.S. cash gas prices click on <0#GAS-IDX=ICE>.

The latest National Weather Service six- to 10-day outlook issued on Sunday called for below-normal temperatures for nearly the entire nation, with some above-normal readings only along parts of the East and West Coasts.

Last week’s gas storage report from the U.S. Energy Information Administration showed total domestic inventories rose the prior week by 90 billion cubic feet to 3.577 trillion.

Total stocks are about 4 percent below last year’s level and are nearly 2 percent above the five-year average.

The EIA last week said it would not release weekly inventory data or other data this week due to the government shutdown. The agency said energy companies should continue to submit their data to the EIA and it will be processed after the furlough period.

Early estimates from traders showed most expect between 74 and 90 bcf were injected into inventories last week, compared with a year-ago build of 54 bcf and a five-year average increase of 75 bcf for that week.

The U.S. National Hurricane Center was tracking a low- pressure system in the Atlantic basin on Monday, but it had a very low chance for further development and was not an immediate threat to offshore energy production.

The U.S. Nuclear Regulatory Commission is not updating its daily reactor status report due to the government shutdown. However, Reuters data showed about 14,800 megawatts, or 15 percent of U.S. capacity was likely offline, up from 13,700 MW out on Friday, but down from 21,100 MW out a year ago and a five-year average outage rate of 19,800 MW. (Editing by Maureen Bavdek, Jim Marshall, Marguerita Choy and Bob Burgdorfer)

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