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U.S. natgas futures slip early despite near-term heat
July 17, 2013 / 1:22 PM / in 4 years

U.S. natgas futures slip early despite near-term heat

* Above-normal temperatures blanket eastern U.S. this week
    * Moderating temperatures on tap for next week, late-month
    * Nuclear power plant outages remain well below average
    * Coming Up: EIA natgas storage data on Thursday

    By Eileen Houlihan
    NEW YORK, July 17 (Reuters) - U.S. natural gas futures slid
about 1 percent early on Wednesday, pressured by forecasts for
moderating weather by next week despite a heatwave currently
blanketing the eastern half of the nation.
    Below average nuclear power plant outages, healthy
inventories and near-record production were also seen limiting
any more upside.
    As of 9:09 a.m. EDT (1309 GMT), front-month August natural
gas futures on the New York Mercantile Exchange were at
$3.64 per million British thermal units, down 3.7 cents, or
about 1 percent.
    The contract gained just under 1 percent over the past two
sessions, backed by the heat, after sliding to a nearly
four-month low of $3.526 in late June.
    Forecaster MDA Weather Services continued to call for hot
weather across the Midwest and East in its one- to five-day
forecast, with seasonal weather expected to move into both
regions in the six- to 10-day time period.
    The latest National Weather Service six- to 10-day forecast
issued on Tuesday also called for above-normal temperatures in
much of the West, with normal or below-normal readings for the
remainder of the nation.
    Last week's gas storage report from the U.S. Energy
Information Administration showed a build in line with analysts'
expectations, but traders noted the injection was the sixth
straight above-average weekly build, further slicing what
remains of an inventory deficit to the five-year average.
    The report showed total domestic inventories rose the prior
week by 82 billion cubic feet to 2.687 trillion cubic feet,
about 14 percent below last year's record-high level, but less
than 1 percent below the five-year average. 
    Early injection estimates for Thursday's EIA report range
from 52 bcf to 72 bcf versus a 29 bcf gain during the same week
last year and a five-year average increase for that week of 70
bcf.
    Nuclear plant outages on Wednesday totaled just 2,800
megawatts, or 3 percent of U.S. capacity, up from 2,500 MW out
on Tuesday, but well below the 7,500 MW out a year ago at this
time and a five-year average outage of about 5,000 MW.
 
    Baker Hughes gas drilling rig data last week showed
the gas rig count rose for a third straight week, gaining seven
to 362 and rising from the recent 18-year low of 349.
 
    
    

 (Editing by Sofina Mirza-Reid)

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