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U.S. natgas futures ease 1% on record output, milder forecasts

    Aug 5 (Reuters) - U.S. natural gas futures eased about 1% on Friday as output neared record highs and
forecasts for hot weather were revised slightly lower, which would mean lower demand for air conditioning.
    Also weighing on prices was 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 stockpiles for next winter.

    Forecasts called for weather to remain hotter than normal through at least mid August.
Gas-fired generators have provided more than 40% of U.S. power in recent weeks, according to federal energy
data. Even with gas futures soaring about 52% in July, gas remained an attractive option because coal prices
 kept hitting record highs.
    Freeport, the second-biggest LNG export plant in the United States, was consuming about 2 billion cubic
feet per day (bcfd) of gas before it shut on June 8. Freeport expects to return the facility to at least
partial service in early October.
    Front-month gas futures fell 5.8 cents, or 0.7%, to settle at $8.064 per million British thermal
units (mmBtu).
    For the week, the contract slid about 2% after easing about 1% last week.
    So far this year, the front-month was up about 116%, as much higher prices in Europe and Asia fed strong
demand for U.S. LNG exports. Gas flows to Europe from Russia dropped following Moscow's Feb. 24 invasion of
Ukraine.
    Gas was trading around $58 per mmBtu in Europe and $45 in Asia.
    The United States became the world's top LNG exporter during the first half of 2022. But exports are
capped no matter how high global gas prices rise because U.S. plants have been operating at full capacity.

    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 - held at 2.5
bcfd on Thursday, same as Wednesday but off the average of 2.8 bcfd in July and far lower than
10.4 bcfd in August 2021.

    TOP PRODUCER
    Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 97.8 bcfd so far in
August from a record 96.7 bcfd in July.
    With hotter weather expected, Refinitiv projected that average U.S. gas demand including exports would
rise from 98.9 bcfd this week to 100.8 bcfd next week before sliding to 99.2 bcfd in two weeks as heat starts
to ease. Refinitiv's forecasts for this week and next were lower than on Thursday.
    The average amount of gas flowing to U.S. LNG export plants rose to 11.0 bcfd so far in August from 10.9
bcfd in July. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can
turn about 13.8 bcfd of gas into LNG.
    The reduction in U.S. exports from Freeport is a problem for Europe, where countries have been trying to
wean themselves off Russian energy.
    Gas stockpiles in Northwest Europe - Belgium, France, Germany and the Netherlands - were
about 5% below the five-year (2017-2021) average for this time of year, according to Refinitiv. Storage was
currently about 66% of capacity.
    That is much healthier than U.S. inventories, which were about 12% below their five-year norm.


                                              Week ended     Week ended     Year ago   Five-year
                                                 Aug 5         Jul 29        Aug 5      average
                                              (Forecast)      (Actual)                   Aug 5
 U.S. weekly natgas storage change (bcf):         +36            +41          +44         +45
 U.S. total natgas in storage (bcf):             2,493          2,457        2,769       2,839
 U.S. total storage versus 5-year average       -12.2%         -12.1%


 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                                       7.96           8.12          4.03        3.73        2.89
 Title Transfer Facility (TTF)                   59.09          59.83        15.43       16.04        7.49
 Japan Korea Marker (JKM)                        44.61          45.95        16.36       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                                     2              2            1           3            4
 U.S. GFS CDDs                                    248            254          209         205          194
 U.S. GFS TDDs                                    250            256          210         208          198

 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                    96.8           98.0          97.9        93.7        86.5
 U.S. Imports from Canada                         8.2            8.1          7.9         7.9          8.0
 U.S. LNG Imports                                 0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                               104.9          106.1        105.8       101.6        94.6

 U.S. Demand (bcfd)
 U.S. Exports to Canada                           2.5            2.6          2.5         2.2          2.5
 U.S. Exports to Mexico                           6.0            5.2          5.7         6.4          5.4
 U.S. LNG Exports                                10.7           10.9          10.8        10.5         4.4
 U.S. Commercial                                  4.4            4.4          4.4         4.4          4.5
 U.S. Residential                                 3.6            3.5          3.6         3.5          3.4
 U.S. Power Plant                                43.9           44.0          45.4        37.0        38.8
 U.S. Industrial                                 21.3           21.4          21.4        20.9        21.2
 U.S. Plant Fuel                                  4.8            4.8          4.8         4.8          4.8
 U.S. Pipe Distribution                           2.1            2.1          2.2         2.1          2.1
 U.S. Vehicle Fuel                                0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                          80.1           80.3          81.9        72.8        74.9
 Total U.S. Demand                               99.3           98.9         100.8        91.9        87.2


 U.S. weekly power generation percent by fuel - EIA
                                              Week ended     Week ended    Week ended  Week ended  Week ended
                                                Aug 5          Jul 29        Jul 22      Jul 15       Jul 8
 Wind                                              8              7            8           6            8
 Solar                                             3              3            3           3            4
 Hydro                                             5              5            6           6            6
 Other                                             2              2            2           2            2
 Petroleum                                         0              0            0           0            0
 Natural Gas                                      42             42            45          44          42
 Coal                                             22             22            22          21          21
 Nuclear                                          17             17            17          17          17


 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
 Hub                                          Current Day     Prior Day
 Henry Hub 8.40           7.81
 Transco Z6 New York 7.87           8.15
 PG&E Citygate 9.21           8.75
 Dominion South 7.52           7.15
 Chicago Citygate 7.85           7.51
 Algonquin Citygate 8.35           8.45
 SoCal Citygate 9.89           9.40
 Waha Hub 7.26           6.80
 AECO 3.63           4.96

 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
 Hub                                          Current Day
 New England 164.25         182.75
 PJM West 114.50         150.75
 Ercot North 122.50         177.75
 Mid C 102.83          63.00
 Palo Verde 101.25         108.50
 SP-15 102.75         102.75

 (Reporting by Scott DiSavino; Editing by Mark Porter and David Gregorio)



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