Natural gas hovering just above 10-year low

Reuters – Fri, Mar 9, 2012 9:17 AM EST

By Eileen Houlihan

NEW YORK (Reuters) - Natural gas futures were slightly higher in early trade Friday, though still hovering above 10-year lows, after some upbeat economic data that could signal a boost in industrial demand.

But most traders said concerns over still-bloated inventories and mild late-winter weather should weigh on prices despite a high number of nuclear power plant outages and planned production cuts due to the depressed prices.

Front-month April natural gas futures on the New York Mercantile Exchange were at $2.30 per million British thermal units in early activity, up 2.8 cents, after sliding Thursday to a contract low of $2.235, just above the January low of $2.231, the lowest price for a front month since March 2002.

In the cash market, however, weekend gas bound for the NYMEX delivery point Henry Hub in Louisiana was heard near $2.22 on active volume of over 1 billion cubic feet, down 2 cents from Thursday's average of $2.24 and at its lowest price since September 2009.

Early Hub cash deals were done at about an 8-cent discount to the front-month contract, little changed from deals done late Thursday at about a 9-cent discount.

Gas on the Transco pipeline at the New York City gate was heard early near $2.31 on volume near 97 mmcf, down 14 cents from Thursday's average of $2.45.

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