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U.S. natgas up 3% as contract expires, global prices surge

       Sept 28 (Reuters) - U.S. natural gas futures gained about 3% on Wednesday as global oil and gas prices
surged and forecasts rose for U.S. gas demand over the next two weeks.
        Oil prices jumped about 4% following unexpected drawdowns in U.S. crude and fuel stocks, and as the
U.S. dollar edged off recent gains.

        The gas price increase came the day the October contract expired, even as Hurricane Ian caused over
500,000 customers to lose power in Florida, which should cut demand for gas from electrical power generators.

        The U.S. National Hurricane Center noted catastrophic storm surge, winds and flooding in the Florida
Peninsula. At 2 p.m. EDT (1800 GMT), Ian was about 25 miles (40 kilometers) west northwest of Fort Myers,
Florida, packing maximum sustained winds of 155 miles per hour.

    Analysts said storms tend to cut demand than supply since they knock out power and can cause liquefied
natural gas (LNG) export terminals to shut. Only about 2% of U.S. gas production comes from the federal
offshore Gulf of Mexico, with most coming from shale basins like the Permian in West Texas and the Marcellus
in Pennsylvania.
    About 308,000 customers in Puerto Rico still lacked power, as did 93,000 in Nova Scotia after Hurricane
Fiona battered the U.S. island and the Canadian province.
    Also weighing on gas prices, demand was expected to decline in October when the Cove Point LNG plant in
Maryland shuts for a couple weeks of maintenance. Cove Point consumes about 0.8 billion cubic feet per day
(bcfd) of gas.
    U.S. gas use has been reduced for months by the outage at the Freeport LNG export plant in Texas, the
second-biggest U.S. LNG export plant. It 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.
    On its last day as the front-month, gas futures for October delivery on the New York Mercantile
Exchange (NYMEX) rose 21.7 cents, or 3.3%, to settle at $6.868 per million British thermal units (mmBtu). On
Tuesday, the contract closed at its lowest since July 14.
        Futures for November, the next front-month, were up about 2% at $6.93 per mmBtu.
    U.S. futures remained up about 84% as global gas prices have soared, feeding demand for U.S. exports due
to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine.
    Gas was trading around $58 per mmBtu in Europe and $41 in Asia. That was an 11% gain
for prices in Europe on concerns Russia could stop gas exports to Europe.
    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 monthly record of 98.0 bcfd in August.
        With cooler autumn weather coming, Refinitiv projected average U.S. gas demand, including exports,
would slip from 91.1 bcfd this week to 88.6 bcfd next week. Those forecasts were higher than Refinitiv's
outlook on Tuesday.

                                              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):         +94           +103          +86         +77
 U.S. total natgas in storage (bcf):             2,968          2,874        3,157       3,283
 U.S. total storage versus 5-year average        -9.6%         -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                                       6.51           6.65          5.11        3.73        2.89
 Title Transfer Facility (TTF)                   55.20          51.72        22.61       16.04        7.49
 Japan Korea Marker (JKM)                        42.47          37.69        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                                    63             58            24          63          83
 U.S. GFS CDDs                                    70             72            89          85          68
 U.S. GFS TDDs                                    133            130          113         148          151

 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                    98.3           98.7          99.2        93.5        87.0
 U.S. Imports from Canada                         8.0            7.9          7.7         8.3          7.7
 U.S. LNG Imports                                 0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                               106.2          106.6        106.9       101.8        95.8

 U.S. Demand (bcfd)
 U.S. Exports to Canada                           2.1            1.9          1.9         2.0          2.4
 U.S. Exports to Mexico                           5.5            5.7          5.6         5.7          5.3
 U.S. LNG Exports                                11.5           11.8          11.1        10.3         4.9
 U.S. Commercial                                  4.8            5.3          5.4         5.0          4.9
 U.S. Residential                                 3.9            5.0          5.1         4.3          3.9
 U.S. Power Plant                                36.4           32.9          31.2        29.8        33.2
 U.S. Industrial                                 21.3           21.6          21.5        20.7        21.2
 U.S. Plant Fuel                                  4.9            4.9          4.9         4.9          4.9
 U.S. Pipe Distribution                           1.9            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                          73.3           71.8          70.1        66.7        70.3
 Total U.S. Demand                               92.4           91.1          88.6        84.7        82.9


 U.S. weekly power generation percent by fuel - EIA
                                              Week ended     Week ended    Week ended  Week ended  Week ended
                                                Sep 30         Sep 23        Sep 16      Sep 9        Sep 2
 Wind                                              9             10            8           6            7
 Solar                                             4              3            3           3            3
 Hydro                                             5              5            5           6            5
 Other                                             2              2            2           2            2
 Petroleum                                         0              0            0           0            0
 Natural Gas                                      41             41            42          45          44
 Coal                                             18             19            19          21          21
 Nuclear                                          21             19            19          18          17


 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
 Hub                                          Current Day     Prior Day
 Henry Hub 6.83           6.75
 Transco Z6 New York 4.90           4.30
 PG&E Citygate 7.80           7.69
 Dominion South 4.89           4.16
 Chicago Citygate 5.43           5.09
 Algonquin Citygate 4.96           4.60
 SoCal Citygate 8.39           8.90
 Waha Hub 3.25           3.79
 AECO 4.00           3.83

 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
 Hub                                          Current Day     Prior Day
 New England 53.00          51.75
 PJM West 68.25          57.50
 Ercot North 50.00          49.90
 Mid C 68.50         108.00
 Palo Verde 95.00         101.25
 SP-15 96.00         105.50
 (Reporting by Scott DiSavino; editing by Jonathan Oatis)



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