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UPDATE 3-U.S. natgas falls 5% on less hot weather forecast, near-record output

 (Adds latest prices)
    July 28 (Reuters) - U.S. natural gas futures fell about 5% on Thursday on forecasts for less hot weather
through mid-August than previously expected and an increase in output to near-record highs.
    That price decline came despite a smaller-than-expected storage build last week when power generators
burned lots of gas to keep air conditioners humming and forecasts for more gas demand next week than
previously expected.
    Gas-fired power plants have provided over 40% of U.S. power this month, according to federal energy data,
even though gas prices were up about 51% so far in July in part because coal prices were at record
highs. That makes it uneconomic for some generators to use their coal-fired plants.
    U.S. power output EEI- hit a preliminary record high in the week to July 23, according to data from
Refinitiv and the Edison Electric Institute (EEI), an industry group.
    The U.S. Energy Information Administration (EIA) said utilities added just 15 billion cubic feet (bcf) of
gas to storage during the week ended July 22.
    That was below the 22-bcf build analysts had forecast in a Reuters poll and compared with an increase of
38 bcf in the same week last year and a five-year (2017-2021) average increase of 32 bcf.

    That small build came despite the ongoing outage at the Freeport liquefied natural gas (LNG) export plant
in Texas, which has left more gas in the United States for utilities to inject into low stockpiles.

    Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day
(bcfd) of gas before it shut on June 8. Freeport LNG estimated the facility will return to partial service in
October. Some analysts say the outage could last longer.
    On its first day as the front-month, gas futures for September delivery fell 42.0 cents, or 4.9%,
to settle at $8.134 per million British thermal units (mmBtu). On Tuesday, when the August contract was still
the front-month, futures soared to an intraday 14-year high of $9.752 per mmBtu.
    So far this year, the front-month was up about 119% as much higher prices in Europe and Asia keep demand
for U.S. LNG exports strong, especially since Europe started reducing the amount of gas it imports from Russia
following Moscow's invasion of Ukraine on Feb. 24.
    Gas was trading around $61 per mmBtu in Europe and at $42 in Asia.
    The United States became the world's top LNG exporter during the first half of 2022. But no matter how
high global gas prices rise, the United States cannot export any more LNG due to capacity constraints.

    Russian gas exports on the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal
(Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route - fell to 2.6
bcfd on Thursday from around 3.7 bcfd since Nord Stream exited a maintenance outage on July 21.

    That decline was due to additional work on the Nord Stream pipe.
    Data provider Refinitiv said average gas output in the U.S. Lower 48 states had risen to 96.2 bcfd so far
in July from 95.3 bcfd in June. That compares with a monthly record high of 96.1 bcfd in December 2021.
    Refinitiv projected average U.S. gas demand including exports would slide from 99.3 bcfd this week to 97.5
bcfd next week as extreme heat starts to ease in some parts of the country. The forecast for next week was
higher than Refinitiv's outlook on Wednesday.
        
                                              Week ended     Week ended     Year ago   Five-year        
                                                Jul 22         Jul 15        Jul 22     average    
                                               (Actual)       (Actual)                   Jul 22    
 U.S. weekly natgas storage change (bcf):         +15            +32          +38         +32           
 U.S. total natgas in storage (bcf):             2,416          2,401        2,709       2,761          
 U.S. total storage versus 5-year average       -12.5%         -12.0% Global Gas Benchmark Futures ($ per mmBtu)   Current Day     Prior Day    This Month  Prior Year   Five Year
                                                                           Last Year    Average      Average
                                                                                          2021     (2017-2021)
 Henry Hub                                       8.53           8.55          3.82        3.73        2.89
 Title Transfer Facility (TTF)                   60.94          61.14        12.49       16.04        7.49
 Japan Korea Marker (JKM)                        43.13          40.21        13.77       18.00        8.95 Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days                                     
 Two-Week Total Forecast                      Current Day     Prior Day    Prior Year   10-Year      30-Year
                                                                                          Norm        Norm
 U.S. GFS HDDs                                     3              4            2           2            3
 U.S. GFS CDDs                                    239            248          207         210          201
 U.S. GFS TDDs                                    242            252          209         212          204 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts                                                  
                                              Prior Week    Current Week   Next Week   This Week    Five-Year
                                                                                       Last Year   Average For Month
 U.S. Supply (bcfd)
 U.S. Lower 48 Dry Production                    96.3           96.4          96.9        93.4        85.6
 U.S. Imports from Canada                         8.1            8.1          8.5         8.2          8.1
 U.S. LNG Imports                                 0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                               104.4          104.5        105.4       101.6        93.8 U.S. Demand (bcfd)                                                                                     
 U.S. Exports to Canada                           2.2            2.5          2.5         2.0          2.3
 U.S. Exports to Mexico                           6.2            5.9          6.1         6.5          5.2
 U.S. LNG Exports                                10.8           10.7          10.1        10.8         4.5
 U.S. Commercial                                  4.4            4.4          4.4         4.4          4.4
 U.S. Residential                                 3.5            3.6          3.6         3.5          3.6
 U.S. Power Plant                                45.7           44.0          42.5        42.1        39.6
 U.S. Industrial                                 21.3           21.3          21.3        21.0        20.8
 U.S. Plant Fuel                                  4.8            4.8          4.8         4.8          4.7
 U.S. Pipe Distribution                           2.2            2.1          2.1         2.2          2.0
 U.S. Vehicle Fuel                                0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                          82.0           80.2          78.8        78.1        75.2
 Total U.S. Demand                               101.1          99.3          97.5        97.4        87.2 U.S. weekly power generation percent by fuel - EIA                                                
                                              Week ended     Week ended    Week ended  Week ended  Week ended
                                                Jul 29         Jul 22        Jul 15      Jul 8        Jul 1
 Wind                                              8              8            6           8            9
 Solar                                             3              3            3           4            4
 Hydro                                             5              6            6           6            8
 Other                                             2              2            2           2            1
 Petroleum                                         0              0            0           0            0
 Natural Gas                                      43             45            44          42          41
 Coal                                             23             22            21          21          21
 Nuclear                                          17             17            17          17          16 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
 Hub                                          Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                         8.65           9.46                               
 Transco Z6 New York NG-CG-NY-SNL              8.00           8.41                               
 PG&E Citygate NG-CG-PGE-SNL                   9.67           10.05                              
 Dominion South NG-PCN-APP-SNL                 7.80           8.16                               
 Chicago Citygate NG-CG-CH-SNL                 8.37           8.68                               
 Algonquin Citygate NG-CG-BS-SNL               8.31           9.01                               
 SoCal Citygate NG-SCL-CGT-SNL                 8.99           9.81                               
 Waha Hub NG-WAH-WTX-SNL                       8.35           8.20                               
 AECO NG-ASH-ALB-SNL                           5.13           5.40 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
 Hub                                          Current Day                                          
 New England EL-PK-NPMS-SNL                   116.25          99.75                              
 PJM West EL-PK-PJMW-SNL                      117.75         114.75                              
 Ercot North EL-PK-ERTN-SNL                   126.00         110.00                              
 Mid C EL-PK-MIDC-SNL                         125.00         139.00                              
 Palo Verde EL-PK-PLVD-SNL                     97.25         105.00                              
 SP-15 EL-PK-SP15-SNL                          99.25          99.50                              
 
 (Reporting by Scott DiSavino
Editing by Marguerita Choy)
  
 
 
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