U.S. natgas futures up on cold and expected big storage draw

by Reuters
Thursday, 19 December 2013 15:05 GMT

(Adds cash prices and latest on NYMEX)

NEW YORK, Dec 19 (Reuters) - U.S. natural gas futures climbed more than 2 percent early Thursday on forecasts for increased heating demand next week and expectations of data showing a near-record inventory withdrawal later in the day.

At 8:59 a.m. EST (1359 GMT), front-month January futures on the New York Mercantile Exchange were up 8.7 cents at $4.339 per million British thermal units.

Overnight, the front-month traded between $4.268 and $4.337. Last week, prices reached a seven-month high of $4.443, less than one cent shy of its highest level in more than two years.

"A shift in emphasis in the latest temperature forecast appears to have triggered a bout of buying that challenged this week's high print," said Addison Armstrong, senior director of market research at Tradition Energy in Stamford, Connecticut.

Private forecaster MDA Weather Services said temperatures would change from near- to record-warm in the East this week to much colder conditions in the Midwest and Great Lakes next week.

A Reuters poll showed industry traders and analysts predict Thursday's report from the U.S. Energy Information Administration will show last week's natural gas storage drawdown was 258 billion cubic feet.

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

In the cash market, gas for delivery Friday at the Henry Hub <GT-HH-IDX> in Louisiana was flat at $4.26. Early deals however eased to 9 cents under the front-month contract, compared with those done late Wednesday at a 4-cent discount.

Gas on the Transco pipeline at the New York citygate <E-TSCO6NY-IDX> was down 37 cents at $4.02.

In U.S. nuclear news, there were 4,700 megawatts out on Thursday versus 5,300 MW out on Wednesday. That compares with 11,800 MW a year ago and a five-year average of 6,800 MW. (Reporting by Scott DiSavino and Eileen Houlihan; Editing by Lisa Von Ahn and Bernadette Baum)

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