US natgas futures end 1 pct lower; little changed for the week

NEW YORK: US natural gas futures eased about 1 percent on Friday but were little changed for the week on forecasts for warmer weather and weaker heating demand in the next couple of weeks. Front-month natural gas futures on the New York Mercantile Exchange settled down 4.4 cents at $4.618 per million British thermal units, down 1 percent for the day. For the week, the front-month contract eased just 0.2 percent after last week's dramatic 24 percent decline which ranked as the largest weekly fall in 17 years.

For the year, gas futures are up 9 percent.

"Winter is winding down and cold temperatures in March are going to quickly become much less of an upside price driver," said Dominick Chirichella from the Energy Management Institute in New Jersey.

Utilities pulled 152 billion cubic feet from storage last week, over the year-ago draw of 149 bcf and the five-year average draw of 105 bcf, the US Energy Information Administration said on Thursday.

Analysts had forecast a draw of just 138 bcf, according to a Reuters poll.

Utilities have withdrawn a record 2.638 trillion cubic feet of gas since the start of the heating season in November, leaving just 1.196 tcf in storage. That is the lowest storage level for this time of year since 2004.

Gas producers speaking at the IHS CERAWeek energy conference in Houston expressed confidence in the industry's ability to rebuild gas in storage.

The number of rigs drilling for gas in North America rose by 10 to 345 in the week to March 7, according to oil services firm Baker Hughes.

MDA Weather Services forecast mostly warmer weather during the next 15 days over much of the United States, except for a cold shot in the Great Lakes and Northeast over the next six to 10 days.

The latest computer weather model showed slightly below-normal temperatures over the next 15 days across the country but a little more cold than the previous model, according to Thomson Reuters Analytics.

The April 2014 futures contract ended at a 5.1-cent premium over the May 2014 contract Friday versus a 5.9-cent premium Thursday.

Gas futures for the balance of the year and the summer of 2014 both lost about 3 cents to $4.61 and $4.59 per mmBtu, respectively, according to Reuters data.

NEXT-DAY GAS, POWER

Next-day gas prices mostly declined on forecasts for warmer temperatures and weaker overall heating demand while wholesale electricity prices were steady to higher for Monday delivery as weekday demand returns.

Next-day Henry Hub gas, the benchmark US supply point in Louisiana, on the IntercontinentalExchange fell 13 cents to average $4.77 per mmBtu Friday, holding at the lowest in five trading days.

Next-day Henry Hub gas ended Friday at a 15-cent premium over the NYMEX front-month contract, down from a 17-cent premium earlier in the day.

In New York, next-day gas continued to fall, sliding $1.33 to $4.97 per mmBtu.

Chicago gas gained $2.23 to average $9.27 on Friday after falling to the lowest level in 13 trading days.

On the power front, PJM West power in the Mid-Atlantic rose from a 10-day low, climbing $2.07 to average $65 per megawatt-hour. New England power at the Nepool hub, which has been holding about $100, did not trade.

In Texas, next-day power in Ercot North rose from a five-day low, adding $6 to average $46 per MWh for Monday.

In the West, power at the SP-15 Hub in Southern California was steady at $50 per MWh, the lowest since the middle of January. The Mid Columbia Hub in the Pacific Northwest, meanwhile, slid $7 to average $28.64.

More than 440,000 homes and businesses were without power in North Carolina and South Carolina on Friday due to a strong ice storm.

Projected water runoff at The Dalles Dam on the Columbia River in Oregon climbed to 100 percent of normal for January-July, the US Northwest River Forecast Center (NWRFC) said on Friday.

Nuclear plant outages, which create demand for natural gas as a substitute fuel for electricity generation, were at 14,000 megawatts on Friday versus 14,600 MW on Thursday. That compared with 15,600 MW out a year ago and a five-year average outage rate of 14,800 MW.