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U.S. natgas falls 4% to 10-week low on oil price drop, mild forecasts

       Sept 23 (Reuters) - U.S. natural gas futures fell about 4% to a fresh 10-week low on Friday on a drop
in crude prices and expectations the weather will remain mild into early October, keeping both heating and
cooling demand low and allowing utilities to inject lots of gas into storage over the next few weeks.
    In addition, the U.S. National Hurricane Center (NHC) projected that Tropical Depression 9 will strengthen
into a hurricane as it moves from the Caribbean Sea to the Gulf of Mexico over the next few days before
hitting South Florida on Wednesday.
        With much of the nation's gas production located away from the Gulf of Mexico in shale basins like the
Permian in West Texas and Appalachia in Pennsylvania, analysts said tropical storms were more
demand-destroying events since they knock out power and can cause liquefied natural gas (LNG) export terminals
to shut.

        Another factor weighing on gas prices was the expectation that demand would decline in October when
the Cove Point 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.

    In Puerto Rico, meanwhile, an estimated 927,000 homes and businesses remain without power after Hurricane
Fiona hit on Sunday.
    Front-month gas futures fell 26.1 cents, or 3.7%, to settle at $6.828 per million British thermal
units (mmBtu), their lowest close since July 14.
    Oil prices plunged about 5% to an eight-month low as the U.S. dollar hit its strongest level in more than
two decades and on fears rising interest rates will tip major economies into recession.
        The gas price drop kept gas futures in technically oversold territory with a relative strength index
(RSI) below 30 for a second day in a row.
    For the week, the gas contract fell about 12%, its biggest weekly percentage decline since June. That was
also the first time the front-month fell for five weeks in a row since January 2019.
    Analysts at energy consulting firm EBW Analytics said recent gas price declines caused gas prices to fall
below ethane prices, which should cause energy firms to capture ethane rather than rejecting it into gas
pipes. That should reduce the amount of total gas (plus ethane) available to the market.
        Despite recent declines, gas futures were still up about 83% 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 $51 per mmBtu in Europe and $38 in Asia.
    Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.7 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 92.4 bcfd this week to 91.4 bcfd next week and 88.7 bcfd in two weeks. The forecasts for next week
was higher than Refinitiv's outlook on Thursday.
    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 23         Sep 16        Sep 23     average
                                              (Forecast)      (Actual)                   Sep 23
 U.S. weekly natgas storage change (bcf):         +86           +103          +86         +77
 U.S. total natgas in storage (bcf):             2,960          2,874        3,157       3,283
 U.S. total storage versus 5-year average        -9.8%         -10.4%

 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                                       7.17           7.09          5.11        3.73        2.89
 Title Transfer Facility (TTF)                   53.11          53.91        22.61       16.04        7.49
 Japan Korea Marker (JKM)                        39.91          38.92        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                                    53             46            25          44          67
 U.S. GFS CDDs                                    88             96            98         104          81
 U.S. GFS TDDs                                    141            142          123         148          148

 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
                                              Prior Week    Current Week   Next Week   This Week    Five-Year
                                                                                       Last Year   Average For
 U.S. Supply (bcfd)
 U.S. Lower 48 Dry Production                    98.8           98.3          98.2        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          106.2        106.2       101.8        95.8

 U.S. Demand (bcfd)
 U.S. Exports to Canada                           2.4            2.1          2.0         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           11.5          11.0        10.1         4.9
 U.S. Commercial                                  4.7            4.8          5.4         4.9          4.9
 U.S. Residential                                 3.7            3.9          5.0         4.2          3.9
 U.S. Power Plant                                37.1           36.4          33.7        31.5        33.2
 U.S. Industrial                                 21.3           21.3          21.8        20.8        21.2
 U.S. Plant Fuel                                  4.9            4.9          4.8         4.9          4.9
 U.S. Pipe Distribution                           2.0            1.9          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           73.3          72.8        68.3        70.3
 Total U.S. Demand                               93.0           92.4          91.4        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 7.76           7.99
 Transco Z6 New York 5.50           6.00
 PG&E Citygate 8.01           8.29
 Dominion South 5.47           6.15
 Chicago Citygate 6.38           6.80
 Algonquin Citygate 5.85           6.45
 SoCal Citygate 6.82           7.35
 Waha Hub 4.88           6.63
 AECO 4.25           3.58

 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
 Hub                                          Current Day     Prior Day
 New England 63.00          76.25
 PJM West 66.25          90.00
 Ercot North 83.00         143.00
 Mid C 59.25          63.00
 Palo Verde 70.50          68.75
 SP-15 72.25          69.50
 (Reporting by Scott DiSavino; Editing by Andrea Ricci and Diane Craft)

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