NEW YORK: US natural gas futures seesawed early Monday, rising early amid the return of weekday industrial demand after the long holiday weekend and cooler weather forecast for consuming regions.
But traders also said comfortable inventories and record high production this year should keep a lid on any gains.
Front-month May natural gas futures on the New York Mercantile Exchange were at $4.398 per million British thermal units early, down 1.4 cents, after climbing as high as $4.445, just under the eight-week high of $4.48 hit on March 28.
The nearby contract gained nearly 7 percent in the last three sessions, its biggest three-day rise in three months.
NYMEX electronic and floor trading was closed Friday for the Good Friday holiday.
In the cash market, gas bound for the NYMEX delivery point Henry Hub in Louisiana, was heard early near $4.39 on volume near 547 million cubic feet, up 6 cents from Thursday's average of $4.33.
Early Hub cash deals were also done at about a 3-cent discount to the front month.
Gas on the Transco pipeline at the New York city gate was heard early near $4.66 on volume near 67 mmcf, up 11 cents from Thursday's average of $4.55.
FUNDAMENTALS
Temperatures in key gas consuming cities New York and Chicago were seen a mix of above and below normal for the next six days, with lows sliding back into the 40s Fahrenheit in both cities, Telvent DTN said.
The National Weather Service six to 10-day outlook issued Sunday called for below-normal temperatures across northern-tier states, with near-normal or above-normal readings for the remainder of the nation.
Last week's storage report from the US Energy Information Administration showed total domestic gas inventories rose by 47 billion cubic feet to 1.654 trillion cubic feet. * Early injection estimates for this week's EIA report range from 36 bcf to 96 bcf versus a year-ago gain of 81 bcf and a five-year average increase for that week of 65 bcf.
The number of rigs drilling for natural gas in the US fell by seven last week to 878, its third straight weekly decline, while horizontal rigs -- the type most often used to extract oil or gas from shale -- jumped 17 to a record high 1,020, data from oil services firm Baker Hughes showed.
ECONOMIC DATA
March US new home sales are due out at 10:00 a.m. EDT (1400 GMT). New home sales fell 16.9 percent in February.
OUTSIDE MARKETS
Trading was curbed by Easter public holidays in Australia, the UK and major European markets.
The dollar won a reprieve after last week's steep slide but traders said it could threaten its all-time low against a basket of currencies if the Fed takes a cautious stance towards tightening later in the week.
Brent crude rose above $124 a barrel on the back of escalating violence in the oil-producing Middle East and post-election unrest in OPEC member Nigeria.
Spot silver surged more than 5 percent, clearing $49 ounce and nearing its 1980 all-time peak on the weak dollar and strong physical demand in Asia, which also sent gold to a record high for a seventh consecutive session.
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