(Updates with settlement price and cash prices) NEW YORK, Feb 21 (Reuters) - U.S. natural gas futures edged higher on Friday and rose nearly 18 percent for the week as a severely depleted storage level and projections for yet another bout of freezing weather kept cash prices above $6 per million British thermal units. A historically cold winter has eaten into gas supplies amid extraordinary heating demand, driving prices up by as much as 50 percent this year from $4.20 to $6.40 per mmBtu, the highest since late 2008. "It's been a monster move," said Jeff Grossman, president of BRG Brokerage in New York. "This is a market that's going to be hanging in there for awhile." Winter weather has yet to ease across much of the United States, even as large cities saw a brief reprieve of warmer temperatures this week. Forecasters at MDA Weather Services in Gaithersburg, Maryland, are calling for "a far-reaching, intense late winter cold snap" next week and into early March that will stretch from East to West and into the southern states, with sub-zero temperatures expected across the Northern tier of the country. Temperatures in Minneapolis, Minnesota, and St. Louis, Missouri, are forecast to drop below zero (below minus 18 degrees Celsius) while in New York and Chicago, temperatures will measure in the single digits and teens, MDA forecasters said. Inventories of natural gas are 40 percent below last year's levels. The U.S. Energy Information Administration reported a 250 billion cubic foot (bcf) draw from storage on Thursday marking a record fourth straight week of 200-bcf plus draws. Some analysts are expecting the nation to finish winter heating season at the end of March with less than one trillion cubic feet of gas stored underground, which would mark a more than 10-year low for that period. Others say utilities will switch back to coal to burn for power generation as those prices remain below $3 on an energy equivalent basis and producers will pump enough gas to replace inventories in time for next winter. On the New York Mercantile Exchange, March gas futures rose 7.1 cents to settle at $6.135 per mmBTU, after earlier trading as high as $6.308. For the week, the front-month contract rose 92 cents, or 17.6 percent. The recent price swings in the gas futures market have shaken some investors out of the shale boom induced lull of the past five years when prices dipped as low as $2, causing steep losses for some this winter. In the cash market, gas for Monday delivery at the benchmark Henry Hub <GT-HH-IDX> gained about 27 cents to average $6.21 per mmBtu in late trade, an 8-cent premium to NYMEX futures. In New York, next-day prices on the Transco Zone 6 pipeline <E-TSCO6NY-IDX> rose $1.03 to average $7.37. Nuclear plant outages, which create demand for natural gas as a substitute fuel, were at 9,693 megawatts (MW), slightly higher than the 9,437 MW on Thursday. That compares with 15,755 MW a year ago and a five-year average outage rate of 10,727 MW.
(Additinal reporting by Eileen O'Grady in Houston; Editing by Bernadette Baum and Marguerita Choy)