UPDATE 1-US natgas falls 2% to 30-month low below $2/mmBtu on mild weather

(Adds latest prices) March 29 (Reuters) - U.S. natural gas futures fell about 2% to a fresh 30-month low on Wednesday in low volume trade with the expiration of the front-month on rising output and mild weather forecasts that should allow utilities to start injecting gas into storage at the beginning of April. "April natural gas contract trades below $2 into expiration ... as it struggled under the weight of a towering South Central regional storage surplus and (as) thinning trading volumes drove increased volatility risks," analysts at energy consulting firm EBW Analytics said in a note. That price decline came even though the amount of gas flowing to liquefied natural gas (LNG) export plants was on track to hit a monthly record high in March after Freeport LNG's export plant in Texas exited an eight-month outage in February. Freeport LNG shut in June 2022 due to a fire. On their last day as the front-month, gas futures for April delivery on the New York Mercantile Exchange (NYMEX) fell 3.9 cents, or 1.9%, to settle at $1.991 per million British thermal units (mmBtu), their lowest close since September 2020 for a second day in a row. That put the front-month below the psychologically significant $2 per mmBtu and pushed it into technically oversold territory with a relative strength index (RSI) below 30 for the first time since late February. With most traders focused on the May contract, less than 3,500 contracts for April delivery traded on the NYMEX on Wednesday. That compares with a daily average of 127,200 front-month contracts traded since the start of the year. Futures for May, which will now become the front-month, gained about 4 cents to $2.18 per mmBtu. The market has been extremely volatile this month, with the front-month gaining or losing more than 5% on nine of the past 20 trading days. Gas prices were on track to drop about 28% for the month of March and 56% for the first quarter of 2023. Freeport LNG's export plant was on track to pull in about 1.8 billion cubic feet per day (bcfd) of gas on Wednesday, up from 1.6 bcfd on Tuesday, according to Refinitiv data. Energy traders said gas flows at that level likely signal that Freeport LNG started the third of three liquefaction trains at the plant. Liquefaction trains turn gas into LNG for export. On March 8, Freeport LNG said it anticipated feedgas flows would rise and fall as the plant returns to full production over the "next few weeks." When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export. Total gas flows to all seven big U.S. LNG export plants rose to an average of 13.1 bcfd so far in March, up from 12.8 bcfd in February. That would top the monthly record of 12.9 bcfd in March 2022, before the Freeport LNG facility shut. SUPPLY AND DEMAND Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.6 bcfd so far in March, up from 98.1 bcfd in February. The monthly record is 99.9 bcfd in November 2022. Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through April 13. With warmer spring-like weather expected to reduce the amount of gas burned to heat homes and businesses, Refinitiv forecast U.S. gas demand, including exports, would drop from 110.5 bcfd this week to 104.5 bcfd next week. Mild winter weather allowed utilities to leave more gas in storage so far this year and should let them start injecting fuel into inventories at the beginning of April. Gas stockpiles were about 23% above their five-year average (2018-2022) during the week ended March 17 and were expected to end about 21% above normal during the colder-than-normal week ended March 24, according to federal data and analysts' estimates. Week ended Week ended Year ago Five-year Mar 24 Mar 17 Mar 24 average (Forecast) (Actual) Mar 24 U.S. weekly natgas storage change (bcf): -54 -72 +15 -17 U.S. total natgas in storage (bcf): 1,846 1,900 1,411 1,532 U.S. total storage versus 5-year average 20.5% 22.7% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2018-2022) Henry Hub 1.99 2.03 4.98 6.54 3.60 Title Transfer Facility (TTF) 13.57 13.63 41.81 40.50 14.39 Japan Korea Marker (JKM) 12.51 12.53 36.96 34.11 14.31 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 206 212 235 211 203 U.S. GFS CDDs 28 29 25 25 23 U.S. GFS TDDs 234 241 260 236 226 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 98.5 99.0 99.2 94.6 89.4 U.S. Imports from Canada 7.8 7.0 7.7 9.7 8.6 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 106.2 106.1 106.9 104.3 99.1 U.S. Demand (bcfd) U.S. Exports to Canada 2.8 2.8 2.8 3.2 3.0 U.S. Exports to Mexico 4.8 5.0 5.0 5.4 5.2 U.S. LNG Exports 13.0 13.2 13.8 12.9 7.4 U.S. Commercial 13.1 11.5 9.7 12.1 12.4 U.S. Residential 20.6 17.7 14.3 18.1 19.6 U.S. Power Plant 29.0 30.2 29.5 25.0 25.7 U.S. Industrial 23.6 22.8 22.1 23.7 23.6 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.5 2.4 2.2 2.5 2.6 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 93.7 89.6 82.8 86.4 88.9 Total U.S. Demand 114.3 110.5 104.5 107.9 104.5 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Mar 31 Mar 24 Mar 17 Mar 10 Mar 3 Wind 12 14 15 12 13 Solar 4 3 3 3 3 Hydro 7 7 7 7 7 Other 3 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 40 37 37 41 40 Coal 16 17 16 16 15 Nuclear 19 18 19 20 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.02 2.04 Transco Z6 New York 1.97 1.96 PG&E Citygate 6.66 6.87 Eastern Gas (old Dominion South) 1.83 1.80 Chicago Citygate 2.18 2.19 Algonquin Citygate 2.18 2.19 SoCal Citygate 9.62 9.50 Waha Hub 1.34 1.21 AECO 1.98 1.96 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 30.50 33.50 PJM West 24.00 30.25 Ercot North 24.25 28.75 Mid C 82.42 86.20 Palo Verde 60.50 57.00 SP-15 68.50 55.50 (Reporting by Scott DiSavino, Editing by Nick Zieminski and Jonathan Oatis)