NEW YORK: US natural gas futures rose slightly on Monday, edging up from Friday's nearly four-month spot chart low amid heat in the West and above-normal nuclear power plant outages.
Power prices in California rose to their highest level in five years on Monday as consumers cranked up air conditioning to escape the heat and the state's biggest power unit remained shut.
But most traders expect the upside to be limited, as milder weather in the mid-Continent and healthy inventories weigh on prices until more hot weather arrives for consuming regions in the Northeast and Midwest.
"The market has been in a medium-term downtrend as the summer cooling season has gotten off to a very slow start limiting the level of weather-related natural gas demand so far this season," said Energy Management Institute partner Dominick Chirichella.
Front-month August natural gas futures on the New York Mercantile Exchange rose 1.2 cents to settle at $3.577 per million British thermal units. The contract traded between $3.531 and $3.607, after slipping to a nearly four month low of $3.526 on Friday.
Other months ended higher as well, with the September contract rising 1.4 cents to $3.573 and winter months gaining about 1 cent each.
In the cash market, gas for Tuesday delivery at the NYMEX benchmark, Henry Hub in Louisiana slid 5 cents to $3.52, with late deals done at 3 cents under the front-month contract, even with deals done late Friday.
Gas on the Transco pipeline at the New York citygate rose 8 cents on the day to $3.67.
The latest National Weather Service six to 10-day forecast issued on Sunday called for above-normal temperatures for the western third of the country and along most of the East Coast, with normal or below-normal readings in the mid-Continent and in Florida.
Nuclear plant outages totaled 6,200 megawatts, or 6 percent of US capacity, down from 10,100 MW out a year ago, but up from a five-year average outage rate of 5,800 MW.
Last week's gas storage report from the US Energy Information Administration showed total domestic inventories rose the prior week by 95 billion cubic feet to 2.533 trillion cubic feet.
Stocks are now more than 17 percent below last year's record high level, but only 1 percent below the five-year average level.
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