May 1, 2013 / 1:36 PM / 5 years ago

U.S. natgas futures edge higher, cool weather adds support

* Front month remains just under recent 21-month high
    * Weather outlooks mixed for May, some cool weather this
    * Coming Up: EIA natgas storage data Thursday

    By Eileen Houlihan
    NEW YORK, May 1 (Reuters) - U.S. natural gas futures edged
higher early on Wednesday, boosted by some near-term cool
weather and expectations for another light weekly inventory
build on Thursday.
    A long cold winter put a huge dent in inventories, and
lingering cool weather in the United States this spring has led
to a slow start to the injection season.
    Still, most traders expect the onset of milder spring
weather in the coming weeks to finally curb any late-season
heating demand before heavy cooling loads kick in.
    As of 9:19 a.m. EDT (1319 GMT), front-month June natural gas
futures on the New York Mercantile Exchange were at
$4.397 per million British thermal units, up 5.4 cents, or just
over 1 percent.
    The contract rose as high as $4.429 in late April, its
highest mark since late July 2011.
    The latest National Weather Service six to 10-day forecast
issued on Tuesday called for above-normal temperatures for about
the western third of the country and in most of the Northeast.
It also forecast mostly below-normal readings elsewhere across
the Southeast, Texas and much of the middle of the country.

    Last week's gas storage report from the U.S. Energy
Information Administration showed domestic inventories rose the
prior week by 30 billion cubic feet, below Reuters poll
estimates for a 32 bcf build, the year-ago gain of 43 bcf and
the five-year average build of 50 bcf for that week.
    Inventories also started the injection season about three
weeks later than expected due to the unusually cold spring.
    Stocks, at 1.734 trillion cubic feet, are nearly 32 percent
below last year and more than 5 percent below the five-year

    Early injection estimates for Thursday's weekly storage
report range from 24 bcf to 35 bcf, versus a 31-bcf build during
the same week last year and a five-year average rise of 67 bcf
for that week.
    EIA data on Tuesday showed gross natural gas production in
February climbed for the first time in three months. Output rose
to about 1.27 bcf per day, or 1.8 percent above the same month
last year, after dropping below year-ago levels in January for
the first time since 2010. 
    The report dimmed prospects that record high production
would slow anytime soon despite Baker Hughes gas drilling rig
data last week that showed the rig count dropped to a 14-year
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