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U.S. natural gas futures pull back slightly ahead of weekend
August 23, 2013 / 1:34 PM / in 4 years

U.S. natural gas futures pull back slightly ahead of weekend

NEW YORK, Aug 23 (Reuters) - U.S. natural gas futures eased
lower early on Friday as prices pulled back ahead of milder
weekend weather despite forecasts for warmer weather in the
Northeast and Midwest for next week that should force homeowners
and businesses to crank up their air conditioners.
    Front-month futures, backed by a bullish weekly inventory
report and the outlook for warmer weather, had gained 5.3
percent in the previous four sessions, breaking some key
resistance along the way. But some technical traders said the
market was overbought and due for a pullback.
    At 9:10 a.m. EDT (1310 GMT), front-month gas futures 
on the New York Mercantile Exchange were down 3.3 cents, or 0.9
percent, at $3.512 per million British thermal units, after
climbing overnight to a four-week high of $3.562.
    Most traders viewed Thursday's 57 billion cubic feet weekly
inventory build as bullish for prices, noting it came in well
below the Reuters poll estimate of 69 bcf and below the lowest
estimate in that poll of 61 bcf.     
    But many traders remain skeptical about recent gains, with
inventories above normal, production flowing at or near record
levels, and summer temperatures likely to wind down soon.
    After a fairly mild weekend, forecaster Commodity Weather
Group noted that the six- to 10-day outlook again turned warmer,
particularly for the Midwest, with temperatures at times
expected to climb near 90 degrees Fahrenheit.    
    The U.S. Energy Information Administration report showed
that total domestic gas inventories last week stood at 3.063
trillion cubic feet, about 1.5 percent above average.
    Early injection estimates for next week's report range from
53 bcf to 79 bcf. Stocks gained 64 bcf during the same year-ago
week. The five-year average increase for that week is 66 bcf.
    Traders were waiting for the next Baker Hughes 
drilling rig report on Friday. Recent gains in gas drilling have
stirred concerns that new investment in gas pipelines, and
processing plants are allowing producers to hook up more wells
and pump even more supply into an already well-supplied market.
    The EIA still expects U.S. gas production in 2013 to hit a
record high for a third straight year.
    Nuclear plant outages on Friday totaled 2,944 megawatts, or
3 percent of U.S. capacity, versus 1,528 MW out on Thursday,
8,302 MW out a year ago and a 5-year average outage rate of
5,111 MW.

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