UPDATE 1-US natgas prices drop 5% on forecasts for less demand

(Adds latest prices) April 24 (Reuters) - U.S. natural gas futures slipped about 5% on Wednesday on an outlook for reduced heating demand next week and on the eve of a closely watched weekly federal storage report. Front-month gas futures for May delivery on the New York Mercantile Exchange were down 15.9 cents, or 8.8%, to settle at $1.65 per million British thermal units (mmBtu). "This is just some repositioning ahead of storage report due tomorrow and along with that we are approaching the May contract expiration towards the end of April here," which is weighing down the natgas market, said Robert DiDona of Energy Ventures Analysis. The U.S. Energy Information Administration (EIA) will release its weekly storage report at 10:30 a.m. ET (1530 GMT), Thursday. Analysts forecast gas stockpiles were over 35% above normal levels for this time of year. LSEG forecasts gas demand in the Lower 48 states, including exports, to fall to 92.7 bcfd next week from 98.0 bcfd this week. In summers "as we progress into May and June, we will start to see higher electric demand, that will give us higher power burns and we start to move out of these maintenance events and if LNG production doesn't grow or respond higher, we are likely to see tighter balances, which will help reduce the current storage overhang," DiDona added. On a daily basis, LNG feedgas was at 12.4 bcfd as the amount of gas flowing to Freeport LNG climbs to 0.5 bcfd from 0.1 bcfd on Friday. The first tanker in 12 days set sail from Freeport LNG's Texas export terminal on Tuesday, signaling the resumption of gas processing after an outage earlier this month. Freeport LNG has been plagued with issues since Winter Storm Heather damaged equipment earlier in January, ANZ Research said in a note. "There are signs that production may resume shortly, we don’t expect it to be back to full capacity for a couple of months," ANZ added. Financial firm LSEG said gas output in the Lower 48 U.S. states have fallen to an average of 96.8 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. U.S. gas production has dropped by around 10% in 2024 as several energy firms, including EQT and Chesapeake Energy , delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and March. EQT is currently the biggest U.S. gas producer and Chesapeake is on track to become the biggest producer after its merger with Southwestern Energy. Meanwhile, in Europe gas prices traded higher, as planned and unplanned outages in Norway and Britain tightened the supply picture, offsetting a return to milder temperatures. Week ended Week ended Year ago Five-year Apr 19 Apr 12 Apr 19 average Forecast Actual Apr 19 U.S. weekly natgas storage change (bcf): +64 +50 +77 +59 U.S. total natgas in storage (bcf): 2,397 2,333 1,986 1,770 U.S. total storage versus 5-year average 35.4% 36.4% 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 1.80 1.80 Title Transfer Facility (TTF) 13.49 13.04 14.39 8.82 10.53 Japan Korea Marker (JKM) 12.34 14.39 14.31 10.23 10.50 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 71 89 130 155 157 U.S. GFS CDDs 70 59 30 36 33 U.S. GFS TDDs 141 148 160 191 190 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 101.3 95.0 97.3 96.8 96.9 U.S. Imports from Canada 7.6 7.8 6.9 7.0 6.7 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0 Total U.S. Supply 108.9 102.8 104.2 103.8 103.6 U.S. Demand (bcfd) U.S. Exports to Canada 1.9 2.4 2.7 2.1 2.1 U.S. Exports to Mexico 6.0 5.4 6.8 6.7 6.5 U.S. LNG Exports 14.4 10.1 10.7 11.9 12.4 U.S. Commercial 7.4 8.4 6.7 7.8 5.8 U.S. Residential 9.6 11.8 8.0 10.1 6.4 U.S. Power Plant 25.6 22.7 28.5 29.2 30.4 U.S. Industrial 21.5 25.9 22.5 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 1.9 2.1 1.9 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 71.2 76.2 72.6 77.3 71.7 Total U.S. Demand 93.5 94.1 92.7 98.0 92.7 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 13 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 39 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 1.59 1.64 Transco Z6 New York 1.49 1.47 PG&E Citygate 2.34 2.22 Eastern Gas (old Dominion South) 1.44 1.33 Chicago Citygate 1.49 1.45 Algonquin Citygate 1.67 1.60 SoCal Citygate 1.66 1.54 Waha Hub 1.37 1.21 AECO 1.11 1.19 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 27.50 27.00 PJM West 32.50 24.50 Ercot North 34.00 12.75 Mid C 37.50 44.00 Palo Verde 3.25 9.50 SP-15 -1.50 4.00 (Reporting by Daksh Grover and Anushree Mukherjee in Bengaluru; Editing by David Gregorio)