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U.S. natgas soars to 13-yr high as power and LNG plants use more fuel

       May 25 (Reuters) - U.S. natural gas futures jumped about 4% to a fresh 13-year high on Wednesday as power
generators and liquefied natural gas (LNG) export plants consumed more of the fuel.
    Power companies burned more gas to generate electricity due to a lack of wind in recent weeks. Wind was on
track to produce just 10% of U.S. power generation this week, down from a recent high of 16%, while gas was on
track to generate about 36% this week, up from a recent low of 33% a few weeks ago.
    On their second to last day as the front-month, gas futures for June delivery rose 38 cents, or
4.3%, to $9.176 per million British thermal units (mmBtu) at 9:28 a.m. EDT (1328 GMT), putting the contract on
track for its highest close since August 2008 for a second day in a row.
    Futures for July, which will soon be the front-month, were up about 4.7% to $9.25 per mmBtu.
    U.S. gas futures were up about 146% so far this year as much higher prices in Europe and Asia kept demand
for U.S. LNG exports strong, especially since Russia's Feb. 24 invasion of Ukraine stoked fears Moscow might
cut gas supplies to Europe.
    Despite those supply concerns in Europe, U.S. futures have soared about 38% over the past month, while
European prices slid about 9% as Russia keeps sending supplies via pipeline and LNG vessels keep delivering
cargoes.
    Gas was trading around $27 per mmBtu in Europe and $22 in Asia.
    U.S. futures, however, continue to lag far behind global prices because the United States is the world's
top producer with all the gas it needs for domestic use, while capacity constraints inhibit additional LNG
exports.
    In the spot market, next-day gas prices for Wednesday in Chicago and at the Henry Hub
benchmark in Louisiana both rose to their highest since hitting record highs during the February
freeze in 2021.
    Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 95.0 billion cubic
feet per day (bcfd) so far in May from 94.5 bcfd in April, off the monthly record of 96.1 bcfd in November
2021.
    Refinitiv projected average U.S. gas demand, including exports, would slide from 89.4 bcfd this week to
88.3 bcfd next week. The forecast for this week was higher than Refinitiv forecast on Tuesday, while its
outlook for next week was lower.
    The average amount of gas flowing to U.S. LNG export plants rose to 12.4 bcfd so far in May from 12.2 bcfd
in April. It hit a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas
into LNG.
    Since the United States cannot produce much more LNG anytime soon, it has worked with allies to divert
cargoes from elsewhere to Europe to help break the region's dependence on Russian gas.
    Russia exported around 7.5 bcfd of gas to Europe on Tuesday, up from 7.4 bcfd on Monday, on the three
mainlines into Germany: North Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the
Russia-Ukraine-Slovakia-Czech Republic-Germany route. That was down sharply from an average of 11.9 bcfd in
May 2021.
    Gas stockpiles in Northwest Europe - Belgium, France, Germany and the Netherlands - were
about 11% below the five-year (2017-2021) average for this time of year, from 39% below normal in mid-March,
according to Refinitiv. Storage was currently about 40% of full capacity.
    U.S. inventories, meanwhile, were in worse shape at around 15% below their five-year norm.


                                              Week ended     Week ended     Year ago   Five-year
                                                May 20         May 13        May 20     average
                                              (Forecast)      (Actual)                   May 20
 U.S. weekly natgas storage change (bcf):         +95            +89          +109        +97
 U.S. total natgas in storage (bcf):             1,827          1,732        2,199       2,139
 U.S. total storage versus 5-year average       -14.6%         -15.2%


 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                                       8.92           8.80          2.96        3.73        2.89
 Title Transfer Facility (TTF)                   26.47          26.90         8.88       16.04        7.49
 Japan Korea Marker (JKM)                        22.07          22.60         9.65       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                                    24             27            34          31          34
 U.S. GFS CDDs                                    126            124           90          98          115
 U.S. GFS TDDs                                    150            151          124         129          149

 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                    95.1           95.4          95.6        92.5        83.9
 U.S. Imports from Canada                         7.6            7.6          7.8         7.3          7.6
 U.S. LNG Imports                                 0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                               102.7          102.9        103.4        99.8        92.6

 U.S. Demand (bcfd)
 U.S. Exports to Canada                           2.8            2.7          2.7         2.1          2.1
 U.S. Exports to Mexico                           6.1            6.1          6.2         6.2          4.8
 U.S. LNG Exports                                12.2           13.3          13.0        10.5         5.1
 U.S. Commercial                                  5.0            5.1          4.6         5.0          5.6
 U.S. Residential                                 4.8            4.9          4.1         4.8          6.7
 U.S. Power Plant                                31.4           29.8          30.5        27.6        26.0
 U.S. Industrial                                 20.7           20.9          20.6        21.4        20.9
 U.S. Plant Fuel                                  4.7            4.7          4.7         4.7          4.6
 U.S. Pipe Distribution                           1.8            1.8          1.8         1.8          1.8
 U.S. Vehicle Fuel                                0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                          68.5           67.4          66.5        65.4        65.7
 Total U.S. Demand                               89.6           89.4          88.3        84.2        77.7


 U.S. weekly power generation percent by fuel - EIA
                                              Week ended     Week ended    Week ended  Week ended  Week ended
                                                May 27         May 20        May 13      May 6       Apr 29
 Wind                                             10             12            15          13          16
 Solar                                             4              4            4           4            4
 Hydro                                             7              7            7           7            7
 Other                                             2              2            2           2            2
 Petroleum                                         0              0            0           0            0
 Natural Gas                                      36             37            34          36          33
 Coal                                             20             20            18          19          19
 Nuclear                                          20             19            19          20          19


 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
 Hub                                         Current Day    Prior Day
 Henry Hub 8.87           8.16
 Transco Z6 New York 7.80           7.28
 PG&E Citygate 9.94           9.59
 Dominion South 7.60           7.27
 Chicago Citygate 8.39           8.02
 Algonquin Citygate 7.88           7.82
 SoCal Citygate 9.14           8.71
 Waha Hub 8.36           7.56
 AECO 5.32           5.17

 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
 Hub                                         Current Day
 New England 74.75          73.50
 PJM West 77.00          77.50
 Ercot North 83.29          66.25
 Mid C 67.86          88.50
 Palo Verde 87.50          51.75
 SP-15 87.75          78.00

 (Reporting by Scott DiSavino
Editing by Bernadette Baum)



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