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U.S. natgas drops 9% to 10-week low on big storage build

       Sept 22 (Reuters) - U.S. natural gas futures plunged about 9% to a near 10-week low on Thursday on a
bigger than expected storage build, record output and forecasts for milder weather through early October that
should allow utilities to keep injecting more gas than usual into storage in coming weeks.
    The U.S. Energy Information Administration (EIA) said utilities added 103 billion cubic feet (bcf) of gas
to storage during the week ended Sept. 16. Traders said that build was bigger than usual as mild weather and
an increase in wind power last week kept the amount of gas power generators burned low.
    "Today's EIA storage injection of 103 bcf ... far exceeded most industry expectations," analysts at energy
consulting firm Ritterbusch and Associates said.
        That was also more than the 93-bcf build analysts forecast in a Reuters poll and compares with an
increase of 77 bcf in the same week last year and a five-year (2017-2021) average increase of 81 bcf.

    Also weighing on gas prices were expectations that demand for the fuel would decline in October when the
Cove Point liquefied natural gas (LNG) plant in Maryland shuts for a couple weeks of maintenance. Cove Point
is consuming about 0.8 billion cubic feet per day (bcfd) of gas.
    U.S. gas use has already been reduced for months by the ongoing outage at the Freeport LNG export plant in
Texas which has left more gas in the United States for utilities to inject into stockpiles for next winter.
    Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 bcfd of gas before it shut on
June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November.

    Removing a threat that U.S. LNG exports could be reduced later this year, however, Cheniere Energy Inc (LNG)
 said it will repair and replace equipment at its Sabine Pass LNG terminal in Louisiana terminal after
tests showed it exceeded newly-imposed hazardous emissions limits. Cheniere said the work will have no
material impact on operations.
    In Puerto Rico, meanwhile, an estimated 1 million homes and businesses remain without power after
Hurricane Fiona hit on Sunday. The U.S. National Hurricane Center warned that a tropical cyclone
would likely form in the Caribbean Sea over the next five days.
    Front-month gas futures fell 69.0 cents, or 8.9%, to settle at $7.089 per million British thermal
units, their lowest close since July 15.
    That was the contract's biggest one-day percentage drop since June when it fell about 17%.
        Despite recent declines, gas futures were still up about 92% so far this year as higher prices in
Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared due to supply
disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine.
    Gas was trading around $54 per mmBtu in Europe and $40 in Asia.
    Russian gas exports via 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 - have averaged
just 1.3 bcfd so far in September, down from 2.5 bcfd in August and 10.8 bcfd in September 2021.

    Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.8 bcfd so far in
September from a record 98.0 bcfd in August.
    With cooler autumn weather coming, Refinitiv projected average U.S. gas demand, including exports, would
slip from 92.6 bcfd this week to 90.7 bcfd next week. Those forecasts were higher than Refinitiv's outlook on
Wednesday.
    The average amount of gas flowing to U.S. LNG export plants rose to 11.3 bcfd so far in September from
11.0 bcfd in August. 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.
                                              Week ended     Week ended     Year ago   Five-year
                                                Sep 16          Sep 9        Sep 16     average
                                               (Actual)       (Actual)                   Sep 16
 U.S. weekly natgas storage change (bcf):        +103            +77          +77         +81
 U.S. total natgas in storage (bcf):             2,874          2,771        3,071       3,206
 U.S. total storage versus 5-year average       -10.4%         -11.3%


 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                                       7.67           7.78          5.11        3.73        2.89
 Title Transfer Facility (TTF)                   55.07          52.61        22.61       16.04        7.49
 Japan Korea Marker (JKM)                        38.92          43.29        23.35       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                                    46             38            25          44          64
 U.S. GFS CDDs                                    96             102           98         104          83
 U.S. GFS TDDs                                    142            140          123         148          147

 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                    98.8           98.0          98.4        93.5        87.0
 U.S. Imports from Canada                         7.7            8.0          8.0         8.3          7.7
 U.S. LNG Imports                                 0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                               106.5          106.0        106.5       101.8        95.8

 U.S. Demand (bcfd)
 U.S. Exports to Canada                           2.4            2.1          2.1         2.5          2.4
 U.S. Exports to Mexico                           5.5            5.5          5.6         5.9          5.3
 U.S. LNG Exports                                11.3           11.6          11.0        10.1         4.9
 U.S. Commercial                                  4.7            4.8          5.2         4.9          4.9
 U.S. Residential                                 3.7            3.9          4.7         4.2          3.9
 U.S. Power Plant                                37.1           36.5          33.6        31.5        33.2
 U.S. Industrial                                 21.3           21.3          21.6        20.8        21.2
 U.S. Plant Fuel                                  4.9            4.8          4.9         4.9          4.9
 U.S. Pipe Distribution                           2.0            2.0          1.9         1.9          2.1
 U.S. Vehicle Fuel                                0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                          73.8           73.4          72.1        68.3        70.3
 Total U.S. Demand                               93.0           92.6          90.7        86.8        82.9


 U.S. weekly power generation percent by fuel - EIA
                                              Week ended     Week ended    Week ended  Week ended  Week ended
                                                Sep 23         Sep 16        Sep 9       Sep 2       Aug 26
 Wind                                             10              8            6           7            5
 Solar                                             3              3            3           3            3
 Hydro                                             5              5            6           5            6
 Other                                             2              2            2           2            2
 Petroleum                                         0              0            0           0            0
 Natural Gas                                      41             42            45          44          44
 Coal                                             19             19            21          21          22
 Nuclear                                          19             19            18          17          18


 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
 Hub                                          Current Day     Prior Day
 Henry Hub 7.99           8.01
 Transco Z6 New York 6.00           6.95
 PG&E Citygate 8.29           8.40
 Dominion South 6.15           6.83
 Chicago Citygate 6.80           6.87
 Algonquin Citygate 6.45           6.90
 SoCal Citygate 7.35           7.30
 Waha Hub 6.63           5.29
 AECO 3.58           3.49

 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
 Hub                                          Current Day     Prior Day
 New England 76.25          74.25
 PJM West 90.00         120.25
 Ercot North 143.00         107.25
 Mid C 63.00          90.00
 Palo Verde 68.75          69.25
 SP-15 69.50          68.25
 (Reporting by Scott DiSavino; Editing by Kirsten Donovan and David Gregorio)



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