US EIA natgas report confuses energy traders

* Gas prices sell off on change in EIA production estimate

* EIA says data changes due late April could change outlook

NEW YORK, April 6 (Reuters) - The U.S. Energy Information Administration stirred confusion among traders on Tuesday after it reversed course in its natural gas production outlook and called for domestic output to be up rather than down in 2010.

"The market has gyrated wildly so far this week in response to EIA data issues that still appear a bit confusing," said Jim Ritterbusch, president of Ritterbusch & Associates in Illinois.

Ritterbusch noted some of yesterday's 5 percent spike in natural gas prices to about $4.28 per million British thermal units appeared prompted by the perception that government data had been overstating production.

But the higher production estimate released in EIA's Tuesday outlook triggered a 4 percent sell-off in gas futures prices at the New York Mercantile Exchange to the $4.10 area.

In its April Short-Term Energy Outlook on Tuesday, EIA said it expected total marketed natural gas production in 2010 to be up 0.4 billion cubic feet per day, or 0.7 percent, to 60.87 bcf, reflecting the continued increase in the number of natural gas drilling rigs over the past month.

That estimate was revised up by more than 2 bcf from EIA's March outlook, which had daily production down 2.7 percent this year to about 58.72 bcf.

The reversal caught gas traders by surprise who had mostly expected EIA to revise its production estimates lower after the agency said last week it will revamp the way it calculates domestic gas output starting with its February gross natural gas production report due out on April 29.

An EIA official earlier this week said output from key producer states like Texas and Louisiana may be overstated and could see significant downward revisions, but he also said EIA's overall output estimate might not see a big change.

EIA said the upward revision in Tuesday's 2010 output estimate could be affected by expected revisions in its EIA-914 gross natural gas production report later this month. [ID:nN06231394] (Reporting by Joe Silha, Editing by Bob Burgdorfer)