US GAS: Futures Rise As Market Rebounds From 3-Month Lows

NEW YORK (Dow Jones) - Natural gas futures rose for the first time in four days Friday, as traders watched the recent declines in the market to a three months as an excuse to buy.
Natural gas for April delivery settled 3.1 cents, or 0.8% higher at $ 3809 a million British thermal units on the New York Mercantile Exchange. The benchmark contract early Friday sank as low as $ 3.731/MMBtu, the lowest intraday price since 15 November.
Futures fell by almost 15% between early February and close on Thursday, as traders bet that strong demand will exceed production by the arrival of spring dip in the use of natural gas. The decline in the early hours of Friday were enough to attract some buyers looking for a good price to enter the trade, market participants said.
"The key here is more a question of whether prices have dropped enough to meet a surge in demand," said Tim Evans, analyst at Citi Futures Perspective in a note to clients. "If consumers by bargain hunting against future needs, or perhaps some services more interested in the change from coal."
Weather forecasts called for slightly warmer temperatures Friday, with average or warmer temperatures than the average seen from southwest through south-central and eastern U.S., Time Group said commodity.
Private forecaster sees temperatures cooler than normal 4-18 marz is generally limited to the northwest and the states of the northern plains.
While the U.S. stockare still below the average of five years of intense cold in December and January, analysts say the market has largely rejected the image of more balanced supply and focused on forecasts for robust production this year.
Meanwhile, the number of rigs operating in the U.S. this week fell by seven to 899, according to oilfield services company Baker Hughes Inc. The tally reduced to the lowest level since February 2010 but are still widely seen as a return additional output growth .
Barclays Capital analysts said in a note to clients Friday that refuses to range from 800 to 850 is needed to begin to balance the U.S. market well supplied.
The number of horizontal drilling equipment, the type often used to exploit the shale rock formations, was reduced by 11 to 970, below the record high of 984 reached two weeks ago.
On Thursday, the benchmark contract sank to its lowest finish since late October after the U.S. Energy Information Administration reported that inventories fell less than half amid mild weather last week.
"We've had four weeks minimum of several months," said Gene McGillian, a broker and analyst at Tradition Energy. "The market will continue to seek an end to this slide at the end of winter."

FUTURES           SETTLEMENT         NET CHANGE 
   Nymex April         $3.809           +3.1c 
   Nymex May           $3.887           +2.8c 
   Nymex June          $3.957           +2.5c 
 
   CASH HUB          RANGE                PREVIOUS DAY 
   Henry Hub           $3.68-$3.79      $3.72-$3.77 
   Transco 65          $3.68-$3.75      $3.70-$3.77 
   Tex East M3         $3.96-$4.01      $4.04-$4.20 
   Transco Z6          $4.33-$4.50      $5.00-$5.20 
   SoCal               $3.63-$3.75      $3.76-$3.79 
   El Paso Perm        $3.53-$3.64      $3.64-$3.68 
   El Paso SJ          $3.54-$3.61      $3.61-$3.66 
   Waha                $3.59-$3.65      $3.64-$3.70 
   Katy                $3.63-$3.70      $3.68-$3.73

(Source: http://online.wsj.com/article/BT-CO-20110304-710412.html)