Natgas futures end down on mild weather, high supply
* Mild weather this week pressures prices
* Very high storage, production also weigh on sentiment
* Cooler outlook for next week limits downside
* Coming Up: Reuters weekly natgas storage poll Wednesday
By Joe Silha
NEW YORK, Dec 4 (Reuters) - Front-month U.S. natural gas
futures ended lower on Tuesday for the fourth time in five
sessions, undermined by record high supplies and mild weather
over much of the United States this week that has slowed overall
demand.
"The price drivers remain the same, warm weather forecasts
and nuclear generation coming back online," Gelber & Associates
analyst Aaron Calder said in a report.
But Calder noted the forecasts, while still above normal,
are less extreme in the extended outlook than the much-above
normal temperatures seen this week.
While high nuclear plant outages helped lift demand for gas
last month, the total at about 15,000 megawatts has dropped
sharply over the last week as units return from autumn
maintenance.
Gas-fired plants are typically used to cover any shut
nuclear units, but traders said lighter loads due to milder
weather have reduced the need for replacement generation.
The front-month contract, which hit a 13-month high of
$3.933 per million British thermal units 10 days ago, posted a
modest gain on Monday, rebounding from a technically overs old
condition after sliding nearly 9 percent last week in its
biggest weekly price drop in five months.
Without more cold to lift demand, most traders agree any
upward move in prices will be difficult, particularly with
inventories still at record highs for this time of year and
production flowing at or near an all-time peak.
Front-month gas futures on the New York Mercantile
Exchange ended down 5.2 cents, or 1.4 percent, at $3.539 per
mmBtu after trading
in a range of $3.525 to $3.611.MDA Weather Services expects temperatures in the Northeast
and Midwest, key gas-consuming regions, to be above to
much-above normal this week. The private forecaster sees cooler
conditions, particularly for the Midwest, next week before
readings moderate again to normal or slightly above normal.
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