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U.S. natgas futures slip 2 percent on profit-taking, moderating weather

Source: Reuters - Mon, 16 Dec 2013 02:18 PM
Author: Reuters
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NEW YORK, Dec 16 (Reuters) - U.S. natural gas futures slid more than 2 percent in early trading on Monday on forecasts for reduced heating demand this week and on profit-taking after prices reached seven-month highs last week.

"Natural gas futures are receding this morning on a combination of a round of profit-taking selling motivated by what looks like a moderating weather pattern working its way across the country over the next week or so," Energy Management Institute partner Dominick Chirichella said in a report.

At 8:55 a.m. EST (1355 GMT), front-month January futures on the New York Mercantile Exchange were down 10.7 cents at $4.244 per million British thermal units.

On Friday, gas reached $4.443, the highest price since May and less than 1 cent shy of its highest mark since July 2011.

The U.S. National Weather Service in its six-to-10-day outlook issued Sunday predicted above-normal temperatures in the East from New York to Florida and west to Louisiana, and below-normal readings in the Central part of the country from Texas to Minnesota and then east to New England.

The NWS's eight-to-14-day outlook shows above-normal temperatures in the western part of the country and Florida, and below-normal readings from the Northeast to the Upper Midwest.

Early withdrawal estimates for this week's storage report from the U.S. Energy Information Administration range from 180 billion cubic feet to 229 bcf, versus a year-ago draw of 70 bcf and a five-year average draw of 133 bcf. The report will be issued on Thursday.

Last week's gas storage report showed total inventories stood at 3.533 trillion cubic feet, more than 7 percent below last year's level and nearly 3 percent below the five-year average.

In U.S. nuclear news, there were 6,200 megawatts out on Monday, versus 6,900 MW out on Friday. That compares with 12,400 MW out a year ago and a five-year average outage rate of 8,200 MW. (Reporting by Scott DiSavino; Editing by Lisa Von Ahn)

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