RTRS: US natgas futures up 1 pct ahead of weekly storage data
* High nuclear plant outages boost near-term demand
* Milder autumn weather on tap for consuming regions
* Traders expect lighter-than-average storage build
* Coming up: EIA natgas storage data Thursday
By Eileen Houlihan
NEW YORK, Sept 20 (Reuters) - U.S. natural gas futures rose
more than 1 percent early Thursday, rising for the first time in
six sessions as a high number of nuclear power plant outages and
expectations for a lighter-than-average weekly storage build
boosted prices.
Some traders also said the market had become a bit oversold,
after dropping about 10 percent in the past five sessions.
But most said prices will have a hard time breaking back
above $3 per million British thermal units, the level at which
gas loses much of its appeal over coal for power generation.
Most traders and analysts expect weekly data from the U.S.
Energy Information Administration to show a build of about 64
billion cubic feet when it is released today at about 10:30 a.m
. EDT (1430 GMT), a Reuters poll showed.
Stocks rose an adjusted 89 bcf in the same week last year,
and on average over the past five years have gained 73 bcf for
that week.
As of 9:26 a.m. EDT (1326 GMT), front-month October natural
gas futures on the New York Mercantile Exchange were at
$2.799 per mmBtu, up 3.7 cents, or just over 1 percent.
The nearby contract peaked at $3.277 in late July, its
highest level since last December.
The National Weather Service's six- to 10-day outlook issued
on Wednesday again called for below-normal temperatures for the
eastern half of the nation and above-normal readings for most of
the western half.
On the nuclear front, outages on Thursday totaled 15,400
megawatts, or 15 percent of U.S. capacity, down from 16,100 MW
out on Wednesday, but up from 10,900 MW out a year ago and a
five-year outage rate of about 10,800 MW.
STOCKS REMAIN HIGH DESPITE LIGHT BUILDS
Last week's EIA storage report showed domestic gas
inventories had risen during the previous week by 27 billion
cubic feet, to 3.429 trillion cubic feet.
Lingering production cuts stemming from Hurricane Isaac and
strong air-conditioning demand slowed the injection, which for
the 19th time in the past 20 weeks fell short of the seasonal
norm.
While record heat this summer helped cut a huge storage
surplus by more than 60 percent from a late-March peak near 900
bcf, traders said stocks were already 81 percent full, according
to the EIA's revised 4.239 tcf estimate of storage capacity.
Stocks remain 11 percent above the same week in 2011 and 9
percent above the five-year average level, providing a huge
cushion that can help offset any weather-related spikes in
demand or more supply disruptions from storms.
(Storage graphic: link.reuters.com/mup44s)
DRILLING RIGS AT 13-YEAR LOW
Baker Hughes said on Friday that the number of rigs drilling
for natural gas in the United States had slid by four to a
13-year low of 448.
(Graphic: r.reuters.com/dyb62s)
The count was down for the 15th time in 17 weeks. The nearly
steady decline in gas-directed drilling over the last 11 months
has fed expectations that producers are getting serious about
stemming the flood of record supplies. So far, however, there is
little evidence that gas output is slowing.
