UPDATE 1-US natgas drops on lower feedgas to Freeport LNG, storage surplus

(Adds latest price) April 26 (Reuters) - U.S. natural gas futures slipped on Friday ahead of the expiration of the May contract, weighed down by a drop in feedgas to Freeport LNG's Texas export terminal and a huge surplus of gas in storage. On its last day as the front-month, gas futures for May delivery on the New York Mercantile Exchange was down 2.4 cents, or 1.5%, to settle at $1.61 per million British thermal units (mmBtu), after drooping during the session to its lowest since March 26. Prices are down over 7% for the week. On a daily basis, LNG feedgas was at 12.1 bcfd as the amount of gas flowing to Freeport LNG fell to 0.1 bcfd from 0.5 bcfd on Monday. Freeport LNG has suffered a series of outages this year, pressuring U.S. natural gas prices and adding to prices in Europe. The issues with Freeport and weather conditions are pushing the market downward today, said Gary Cunningham, director of market research at Tradition Energy. However, the first tanker set sail from Freeport LNG's Texas export terminal on Tuesday, raising hopes of a resumption of gas processing after an outage earlier this month. The U.S. Energy Information Administration (EIA) on Thursday said utilities injected 92 billion cubic feet (bcf) of gas into storage during the week ending April 19, beating the expectations of traders surveyed by Reuters ahead of the report, who expected weekly natural gas stocks would be up 82 bcf. "We continue to see a very supply-heavy supply demand balance, which is why prices will remain depressed," Cunningham added. Financial company LSEG forecasts gas demand in the Lower 48 states, including exports, to fall to 91.7 bcfd next week, from 92.2 bcfd this week. "The expansion in the expiring May-June gas spread is offering additional evidence of an oversupplied market in which few users, such as utilities, see little need to stand for delivery with supplies more than ample to meet needs of a warmer than normal summer," energy advisory Ritterbusch and Associates said in a note. LSEG said gas output in the Lower 48 U.S. states had fallen to an average of 96.9 billion cubic feet per day (bcfd) in April from 100.8 bcfd in March. That compares with a monthly record of 105.6 bcfd in December 2023. Meanwhile, in Europe gas prices were slightly lower as forecasts for milder weather outweighed the impact of Norwegian outages and concerns over liquefied natural gas (LNG) supply. Year ago Five-year Week ended Week ended Apr 19 average Apr 26 Apr 19 Apr 19 Forecast Actual U.S. weekly natgas storage change (bcf): +77 +59 +47 +92 U.S. total natgas in storage (bcf): 1,986 1,770 2,472 2,425 U.S. total storage versus 5-year average 34.2% 37% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year Last Year Average Average 2023 (2018-2022) Henry Hub 2.20 2.66 3.60 1.56 1.66 Title Transfer Facility (TTF) 13.49 13.04 14.39 9.24 9.41 Japan Korea Marker (JKM) 12.34 14.39 14.31 10.43 10.44 LSEG 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 62 64 135 148 150 U.S. GFS CDDs 73 73 32 38 35 U.S. GFS TDDs 135 137 167 186 185 LSEG U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year (2019-2023) Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 101.3 95.0 97.0 96.9 97.0 U.S. Imports from Canada 7.6 7.8 7.1 6.8 6.7 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0 Total U.S. Supply 108.9 102.8 104.1 103.7 103.7 U.S. Demand (bcfd) U.S. Exports to Canada 1.9 2.4 2.1 2.2 2.2 U.S. Exports to Mexico 6.0 5.4 6.7 6.6 6.5 U.S. LNG Exports 14.4 10.1 11.7 12.1 12.1 U.S. Commercial 7.4 8.4 7.8 5.8 5.5 U.S. Residential 9.6 11.8 10.1 6.3 5.8 U.S. Power Plant 25.6 22.7 28.6 30.0 30.5 U.S. Industrial 21.5 25.9 23.3 23.3 22.3 U.S. Plant Fuel 4.9 5.0 4.8 4.8 4.8 U.S. Pipe Distribution 2.1 2.3 2.0 1.9 1.9 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 71.2 76.2 76.8 71.3 70.9 Total U.S. Demand 93.5 94.1 97.3 92.2 91.7 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Apr 19 Apr 12 Apr 5 Mar 29 Apr 26 Wind 18 16 15 16 14 Solar 7 6 5 5 6 Hydro 7 7 7 8 7 Other 2 1 1 1 1 Petroleum 0 0 0 0 0 Natural Gas 35 37 38 38 38 Coal 13 13 13 13 13 Nuclear 19 20 20 19 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 1.46 1.60 Transco Z6 New York 1.32 1.53 PG&E Citygate 2.02 2.25 Eastern Gas (old Dominion South) 1.27 1.37 Chicago Citygate 1.25 1.40 Algonquin Citygate 1.40 1.56 SoCal Citygate 1.70 1.75 Waha Hub 0.86 0.34 AECO 0.97 1.04 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 23.75 25.75 PJM West 22.25 27.50 Ercot North 19.50 14.50 Mid C 25.00 38.07 Palo Verde -0.50 1.50 SP-15 4.00 -1.75 (Reporting by Daksh Grover and Anushree Mukherjee in Bengaluru Editing by Marguerita Choy and David Gregorio)