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U.S. natgas futures end up on storage expectations

Source: Reuters - Tue, 17 Dec 2013 07:48 PM
Author: Reuters
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(Adds latest cash and futures prices, quote)

NEW YORK, Dec 17 (Reuters) - U.S. natural gas futures ended higher on Tuesday on expectations for a large inventory draw on Thursday despite forecasts for moderating weather this week that should slow heating demand.

"Prices are bouncing back. Some people are expecting a record inventory draw on Thursday, and we had an extended shot of cold air last week that forced utilities to pull more gas out of storage," a Texas-based trader said.

Front-month January futures on the New York Mercantile Exchange settled up 0.8 cent at $4.287 per million British thermal units after trading between $4.194 and 4.326.

In the ICE cash market, gas for delivery Wednesday at the Henry Hub <GT-HH-IDX> in Louisiana ended down 1 cent at $4.21. Late deals were heard at 2 cents under the front-month contract, compared with those done late Monday at a 3-cent premium.

Gas on the Transco pipeline at the New York citygate <E-TSCO6NY-IDX> was down $1.30 at $5, while Chicago <MC-CHICIT-IDX> lost 9 cents to $4.40.

Private forecaster MDA Weather Services, in its one- to five-day outlook, forecast more warmth would spread East. It expects less cold than previously forecast in its six- to 10-day outlook.

The U.S. National Weather Service, in its six- to 10-day outlook, forecast below-normal temperatures in New England and the central part of the country from Minnesota to Texas, and above-normal conditions in the West and Southeast.

Withdrawal estimates for Thursday's storage report from the U.S. Energy Information Administration range from 220 billion cubic feet to 284 bcf, with most in the 250s. Stocks dropped 70 bcf in the same week a year ago and the five-year average draw for that week is 133 bcf.

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

In U.S. nuclear news, there were 6,000 megawatts out on Tuesday, versus 6,200 MW out on Monday. That compares with 12,000 MW out a year ago and a five-year average outage rate of 7,800 MW. (Reporting by Julia Edwards and Scott DiSavino; Editing by John Wallace, Meredith Mazzilli and Jonathan Oatis)

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