UPDATE 1-US natgas prices up 2% to 1-month high on rising flows to Freeport LNG, lower output

(Adds latest prices) By Scott DiSavino April 9 (Reuters) - U.S. natural gas futures rose about 2% on Tuesday to a one-month high, on a preliminary increase in flows to the Freeport LNG export plant in Texas and a drop in output as pipeline maintenance trapped gas in the state and producers reduced drilling after prices fell in February and March to 3-1/2-year lows. Limiting price gains, forecasters lowered their demand outlook for the next two weeks. Prices were also pressured by a preliminary drop in gas flows to Venture Global LNG's export plant in Louisiana, negative spot power and gas prices in parts of Texas, California and Arizona over the past few weeks, and ample amounts of gas in storage. Front-month gas futures for May delivery on the New York Mercantile Exchange rose 2.8 cents, or 1.5%, to settle at $1.872 per million British thermal units (mmBtu), their highest close since March 6. Analysts projected gas stockpiles were about 37% above normal levels for this time of year. The U.S. Energy Information Administration projected that gas and power demand would hit record highs in 2024, but gas output would decline for the first time since 2020 when COVID-19 pandemic lockdowns cut demand. EIA also projected that U.S. gas prices would be cheaper than coal for the first time ever. In the spot market, next-day gas prices at the Waha hub in the Permian Basin in West Texas fell to negative $1.20 per mmBtu, their lowest level since April 2020, according to prices from SNL Energy on the LSEG terminal. Over the past several weeks, daily power and gas prices in Texas, California and Arizona have traded below zero due to low demand, ample renewable sources of power and pipeline maintenance that has trapped gas in Texas. SUPPLY AND DEMAND Financial firm LSEG said gas output in the Lower 48 U.S. states has fallen to an average of 99.2 billion cubic feet per day (bcfd) so far in April, down from 100.8 bcfd in March. That compares with a monthly record of 105.6 bcfd in December 2023. On a daily basis, output was on track to drop by 3.7 bcfd over the past three days to a preliminary 11-week low of 96.4 bcfd on Tuesday. Energy traders have said preliminary data was often revised higher later in the day. With warmer weather coming, LSEG forecast gas demand in the Lower 48, including exports, would fall from 100.9 bcfd this week to 96.1 bcfd next week. That forecast was lower than LSEG's outlook on Monday. Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants have slid to an average of 12.5 bcfd so far in April, down from 13.1 bcfd in March. That compares with a monthly record of 14.7 bcfd in December. Analysts do not expect U.S. LNG feedgas to return to record levels until all three liquefaction trains at Freeport LNG's plant in Texas return to service. The amount of gas flowing to Freeport was on track to rise to 1.3 bcfd on Tuesday, up from 0.9 bcfd on Monday and an average of 0.8 bcfd over the prior seven days. Flows to Venture Global LNG's Calcasieu Pass, however, declined to 0.9 bcfd on Tuesday, from 1.4 bcfd on Monday and an average of 1.5 bcfd over the prior seven days. Freeport has said it expects Trains 1 and 2 to remain shut until May for inspections and repairs, while Train 3 was operating. Each Freeport train can turn about 0.7 bcfd of gas into LNG. Week ended Week ended Year ago Five-year Apr 5 Mar 29 Apr 5 average Forecast Actual Apr 5 U.S. weekly natgas storage change (bcf): +1 -37 +11 +24 U.S. total natgas in storage (bcf): 2,260 2,259 1,848 1,650 U.S. total storage versus 5-year average 37.0% 38.9% 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 1.89 1.84 2.20 2.66 3.60 Title Transfer Facility (TTF) 9.06 8.81 13.49 13.04 14.39 Japan Korea Marker (JKM) 9.58 9.55 12.34 14.39 14.31 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 102 104 146 192 157 U.S. GFS CDDs 40 39 34 28 33 U.S. GFS TDDs 142 143 180 220 190 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 99.7 99.4 99.6 101.7 95.0 U.S. Imports from Canada 7.5 7.3 7.4 7.5 7.8 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0 Total U.S. Supply 107.2 106.7 107.0 109.2 102.8 U.S. Demand (bcfd) U.S. Exports to Canada 2.8 2.6 2.6 2.1 2.4 U.S. Exports to Mexico 6.2 6.3 6.1 5.5 5.4 U.S. LNG Exports 12.5 12.9 13.2 13.8 10.1 U.S. Commercial 9.6 8.2 6.7 7.8 8.4 U.S. Residential 13.8 11.1 8.2 10.2 11.8 U.S. Power Plant 28.3 29.7 29.7 29.2 22.7 U.S. Industrial 23.5 23.0 22.5 21.5 25.9 U.S. Plant Fuel 4.9 4.9 4.9 4.9 5.0 U.S. Pipe Distribution 2.2 2.1 2.0 2.1 2.3 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 82.5 79.1 74.2 75.8 76.2 Total U.S. Demand 104.1 100.9 96.1 97.2 94.1 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021 % of Normal % of Normal % of Normal % of Normal % of Normal Forecast Forecast Actual Actual Actual Apr-Sep 82 82 83 107 81 Jan-Jul 82 82 77 102 79 Oct-Sep 83 83 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Apr 12 Apr 5 Mar 29 Mar 22 Mar 15 Battery Storage 0 0 Wind 19 15 16 13 15 Solar 6 5 5 5 4 Hydro 7 7 8 8 8 Other 1 1 1 1 1 Petroleum 0 0 0 0 0 Natural Gas 34 38 38 40 38 Coal 12 13 13 13 12 Nuclear 21 20 19 20 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 1.73 1.58 Transco Z6 New York 1.35 1.54 PG&E Citygate 2.40 2.34 Eastern Gas (old Dominion South) 1.26 1.41 Chicago Citygate 1.54 1.52 Algonquin Citygate 1.37 1.66 SoCal Citygate 1.83 2.25 Waha Hub -1.20 0.63 AECO 1.07 1.13 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 26.50 27.75 PJM West 35.00 30.25 Ercot North 22.42 30.00 Mid C 23.80 28.80 Palo Verde -3.75 -20.00 SP-15 -2.50 -15.00 (Reporting by Scott DiSavino; Editing by Paul Simao and David Gregorio)