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US natgas futures edge higher before weekly storage data

* Front month remains below Tuesday's 2012 peak

* Millions on East Coast still without power after Sandy

* Nuclear outages stay high

* Coming up: EIA natgas storage data Thursday

By Eileen Houlihan

NEW YORK, Nov 1 (Reuters) - U.S. natural gas futures edged higher early on Thursday, despite weak demand in the wake of Hurricane Sandy and expectations that weekly government storage data will show another build to already bloated inventories.

Sandy came ashore in New Jersey late on Monday, leaving millions still without power on Thursday across the northeastern United States.

Several nuclear power plants in its path had also been shut or slowed due to floodwaters, but some had begun to return to full service by Wednesday.

Nuclear outages totaled about 30,600 megawatts, or 30 percent of U.S. capacity, down slightly from 30,700 MW out on Wednesday, but up from 18,000 MW out a year ago and a five-year outage rate of about 22,800 MW.

Traders and analysts expect weekly data from the U.S. Energy Information Administration to show a build of about 67 billion cubic feet when it is released on Thursday at 10:30 a.m. EDT (1430 GMT), a Reuters poll showed.

Stocks rose an adjusted 82 bcf in the same week last year, and on average over the past five years have gained about 57 bcf this week. This week's EIA natgas storage report will be issued as usual despite the EIA delaying other reports due to Sandy.

As of 9:21 a.m. EDT (1321 GMT), NYMEX front-month December natural gas futures

were at $3.701 per million British thermal units, up 0.9 cent.

The contract rose to a 2012 high of $3.82 on Tuesday, the highest level for a front month since early November 2011.

The National Weather Service's six- to 10-day outlook issued on Wednesday called for above-normal temperatures for nearly the entire country, with some below-normal readings only in the Southeast.

RECORD INVENTORIES

Last week's EIA gas storage report showed domestic inventories rose the previous week by 67 bcf to 3.843 trillion cubic feet, a record high for this time of year and just 9 bcf shy of the all-time peak of 3.852 tcf hit last November.

(Storage graphic: )

While a huge inventory overhang peaked in late March at nearly 900 bcf, it has been cut by 83 percent. Storage is still 91 percent full and already well above the average peak for the year of 3.7 tcf, typically hit in early November.

Current estimates by some traders and analysts show stocks peaking at about 3.925 tcf before winter withdrawals begin.

RIG COUNT RESUMES SLIDE

Data from Baker Hughes last week showed the gas-drilling rig count slid by 11 to a 13-year low of 416.

(Rig graphic: )

The count is down 55 percent since peaking at 936 in October 2011, with the decline feeding expectations that producers were getting serious about stemming record supplies.

But so far, there is little evidence that gas output is slowing.

While dry gas drilling has become largely uneconomical at current prices, gas produced from more-profitable shale oil and shale gas liquids wells has kept output near record highs.

(Editing by Dale Hudson)

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

Keywords: MARKETS NYMEX/NATGAS