* Cold forecast seen lifting demand, limiting downside
* Comfortable storage, record production weigh on sentiment
* Coming up: Reuters weekly natgas storage poll Wednesday
By Joe Silha
NEW YORK, Nov 19 (Reuters) - U.S. natural gas futuresreversed course and ended lower on Tuesday, as early buying oncolder weather forecasts for later this week and next week wasoffset by sellers noting that upside momentum seemed to havestalled this week.
"It (the sell-off) may be a little technical follow-throughafter yesterday, but it's on light volume and I wouldn'tattribute a lot to it. The market really wants to see some coldwith staying power, and that's not clear right now," saidPatrick Saunders, analyst at Albans Energy in Houston.
Front-month gas futures on the New York MercantileExchange ended down 6.1 cents, or 1.7 percent, at $3.556 permillion British thermal units after trading between $3.551 and$3.647.
The nearby contract, which hit a 3-1/2-week high of $3.705on Monday then closed lower on profit taking ahead of chartresistance, is down 2.8 percent so far this week. It had gaineda total of 4.2 percent in the previous two weeks.
Traders said weaker cash prices also prompted some selling,particularly with computer weather models constantly changingthe temperature outlook for early December.
While MDA Weather Services expects below-normal or muchbelow-normal temperatures to dominate the eastern two-thirds ofthe nation in its six- to 10-day outlook, the forecaster didnote a little less cold in the 11- to 15-day time frame.
In the ICE cash market, prices for Wednesday delivery atHenry Hub , the benchmark supply point in Louisiana,slid 9 cents to $3.62 though early differentials firmed to 1cent over NYMEX from a 3-cent discount on Monday.
Gas on the Transco pipeline at the New York citygate slipped 4 cents to $3.76 despite the chillyWednesday outlook.
Technical traders said the front month needed a close aboveresistance in the low $3.70s to set the stage for more upside.
But with stockpiles at comfortable levels and productionflowing at a record-high pace, many traders remain skeptical offurther gains unless the cold weather is sustained.
Traders and analysts are expecting the season's firstinventory draw when the U.S. Energy Information Administrationreleases its weekly storage report on Thursday.
Withdrawal estimates range from 15 billion to 42 billioncubic feet, with most in the 30 bcf area. That would comparewith a 36 bcf decline in the year-earlier week and a five-yearaverage drop of 2 bcf for that week.
EIA reported last week that total domestic gas inventoriesstood at 3.834 trillion cubic feet, just 2 percent below lastyear's record highs at that time, but 1.5 percent above thefive-year average.
Baker Hughes drilling data showed the gas rig counthas risen in 13 of the last 21 weeks. A rising rig count canstir talk that new pipelines and processing plants may beencouraging producers to hook up more wells and pump more gasinto an already well-supplied market.
With over a billion cubic feet per day of new gas flowingfrom Marcellus shale this month and more supply likely coming,many traders agreed that temperatures this winter will have tostay cold if prices are to avoid testing the $3 mark.
The EIA expects U.S. gas production in 2013 to hit a recordhigh for the third straight year, then climb again in 2014.
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