By Eileen Houlihan

NEW YORK, Dec 13 (Reuters) - U.S. natural gas futures edged

lower for a sixth straight day early Thursday, falling to a

two-month spot chart low amid forecasts for mild weather in the

eastern half of the country.

In addition, traders expect weekly government storage data

to show only a slight drawdown from winter inventories, leaving

storage back above year-ago levels.

Most said that without some sustained cold to boost heating

loads, gas prices are likely to remain lower.

Traders and analysts expect weekly data from the U.S. Energy

Information Administration to show a draw of about 4 billion

cubic feet when it is released Thursday at about 10:30 a.m. EST

(1530 GMT), a Reuters poll showed.

Stocks fell an adjusted 79 bcf during the same week last

year, and on average over the past five years have fallen 113

bcf that week.

As of 9:18 a.m. EST (1418 GMT), front-month January gas

futures on the New York Mercantile Exchange were at

$3.344 per million British thermal units, down 3.8 cents, after

sinking to a two-month low of $3.328 in electronic trading.

The front-month contract hit a 13-month high of $3.933 in

late November before sliding about 9 percent in the past five

sessions, its biggest five-day slide in 12 weeks.

The latest National Weather Service six-to-10-day forecast

issued on Wednesday again called for above-normal temperatures

for most of the eastern half of the country and mainly normal

readings in the West. Some below-normal temperatures were

expected only on the West Coast and a small portion of the

mid-Atlantic coast.

Nuclear outages totaled about 12,300 megawatts, or 12

percent of U.S. capacity, even with Wednesday's outages, but up

from 9,500 MW out a year ago and a five-year outage rate of

about 9,100 MW.

INVENTORIES SLIP BELOW YEAR-AGO, STILL HIGH

Data from the EIA last week showed gas inventories for the

week ended Nov. 30 fell 73 bcf to 3.804 trillion cubic

feet.

While the draw trimmed storage to below year-ago levels for

the first time in 13 months, some traders noted that total

inventories were still 5 percent above the five-year average, a

comfortable cushion to meet any winter spikes in demand or

unexpected disruptions in supply.

(Storage graphic: http://link.reuters.com/mup44s)

A huge inventory surplus to last year, which peaked in April

at nearly 900 bcf, has been wiped out, but stocks are expected

to climb back above year-ago levels in this week's EIA report.

Stocks hit a record high of 3.929 tcf in early November,

making this the fourth straight year in which gas inventories

have headed into the heating season at a record peak.

RIGS DECLINE, PRODUCTION STILL NEAR RECORD

Baker Hughes data last week showed the gas-directed rig

count fell by seven the prior week to 417, still just above the

13-1/2-year-low of 413 posted four weeks ago.

(Rig graphic: http://r.reuters.com/dyb62s)

Drilling for natural gas has mostly been in decline for more

than a year, with gas rigs down 55 percent since peaking in 2011

at 936 in October.

In its short-term energy outlook for December, EIA said

Tuesday it expects gas production in 2013 to climb to a record

high for a third straight year, while consumption was expected

to drop slightly from 2012 levels.

(Editing by Grant McCool)

Keywords: MARKETS NYMEX/NATGAS

(eileen.houlihan@thomsonreuters.com, Twitter @eileenreuters)(+1 646 223-6074)(Reuters Messaging: eileen.houlihan.reuters.com@reuters.net)

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