UPDATE 2-US natgas prices jump 7% on smaller-than-expected storage build, cold weather

(Adds latest prices) Oct 26 (Reuters) - U.S. natural gas futures jumped about 7% to the highest in a week ahead of options expiration on a smaller-than-expected storage build and forecasts for colder than expected weather and higher heating demand over the next two weeks. The U.S. Energy Information Administration (EIA) said utilities added 74 billion cubic feet (bcf) of gas into storage during the week ended Oct. 20. That was smaller than the 80-bcf build analysts forecast in a Reuters poll and compares with an increase of 61 bcf in the same week last year and a five-year (2018-2022) average increase of 66 bcf. Traders noted the storage increase was still bigger than normal for this time of year because mild weather last week kept heating demand low. Analysts at energy advisory Ritterbusch and Associates said the price spike was due to "A combination of continued cold near-term temperature forecasts that are now stretching through the first week of November in some cases and a smaller than expected storage injection." On its second-to-last day as the front-month, gas futures for November delivery on the New York Mercantile Exchange (NYMEX) rose 20.4 cents, or 6.8%, to settle at $3.214 per million British thermal units (mmBtu), their highest close since Oct. 13. The December future, which will soon be the front-month, was up about 14 cents to around $3.52 per mmBtu. That put the front-month up for a fourth day in a row and kept it over the psychological round number of $3 per mmBtu, where lots of put and call options were still open, ahead of the November options expiration on Thursday and the November front-month expiration on Friday. With almost twice as many $3 November puts outstanding (34,010 contracts) versus $3 November calls (19,735 contracts), according to data from the NYMEX, analysts said the firms that sold those options had more reasons to want the November front-month to close over $3 per mmBtu when those options expire on Thursday (keeping those puts out of the money) than under $3 (putting the calls into the money). SUPPLY AND DEMAND LSEG said average gas output in the Lower 48 U.S. states rose to an average of 103.9 billion cubic feet per day (bcfd) so far in October, up from 102.6 bcfd in September and a record high of 103.1 bcfd in July. Even though temperatures in the Lower 48 will average near normal through Nov. 10, meteorologists noted the weather was turning seasonally cooler and will be much colder than normal from Oct. 29 to Nov 2. But that extreme cold will only hit parts of the country, with Denver expected to see snow and highs of just 30 degrees Fahrenheit (-1 degree Celsius) on Sunday, while temperatures in New York will reach 80 F (27 C) on Saturday, according to meteorologists at AccuWeather. That compares with normal highs of 60 F (16 C) in New York and 63 F (17 C) in Denver for this time of year. LSEG forecast U.S. gas demand, including exports, would jump from 97.8 bcfd this week to 107.3 bcfd next week. The forecast for this week was higher than LSEG's outlook on Wednesday. Pipeline exports to Mexico slid to an average of 6.9 bcfd so far in October, down from a monthly record high of 7.2 bcfd in September. Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants rose to 13.6 bcfd so far in October, up from 12.6 bcfd in September. That compares with a record high of 14.0 bcfd in April. Week ended Week ended Year ago Five-year Oct 20 Oct 13 Oct 20 average Actual Actual Oct 20 U.S. weekly natgas storage change (bcf): 74 97 61 66 U.S. total natgas in storage (bcf): 3,700 3,626 3,387 3,517 U.S. total storage versus 5-year average 5.2% 5.1% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 3.01 3.01 6.08 6.54 2.89 Title Transfer Facility (TTF) 15.39 15.76 38.37 40.50 7.49 Japan Korea Marker (JKM) 17.96 18.84 32.98 34.11 8.95 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 209 197 124 184 208 U.S. GFS CDDs 26 27 25 29 22 U.S. GFS TDDs 235 224 149 203 230 LSEG 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 104.5 104.8 105.1 99.4 93.1 U.S. Imports from Canada 6.9 6.6 6.2 8.2 7.8 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 111.5 111.4 111.3 107.6 101.0 U.S. Demand (bcfd) U.S. Exports to Canada 1.4 1.5 1.5 2.4 2.2 U.S. Exports to Mexico 6.7 6.9 7.0 5.5 5.6 U.S. LNG Exports 14.2 13.8 13.6 11.5 7.1 U.S. Commercial 6.8 6.6 10.0 7.8 7.0 U.S. Residential 7.8 7.4 14.1 9.9 7.5 U.S. Power Plant 30.5 32.2 29.7 28.3 30.1 U.S. Industrial 22.6 22.1 23.8 22.7 22.1 U.S. Plant Fuel 5.2 5.2 5.2 5.2 5.1 U.S. Pipe Distribution 2.0 2.0 2.3 2.0 2.0 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 75.0 75.6 85.2 76.0 73.9 Total U.S. Demand 97.4 97.8 107.3 95.4 88.8 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 92 93 83 107 81 Jan-Jul 89 89 77 102 79 Oct-Sep 89 88 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Oct 27 Oct 20 Oct 13 Oct 6 Sep 29 Wind 15 10 10 11 8 Solar 4 4 4 4 4 Hydro 5 5 5 5 5 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 40 42 41 42 44 Coal 16 17 16 16 17 Nuclear 19 20 21 19 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.86 2.85 Transco Z6 New York 1.23 1.30 PG&E Citygate 7.73 6.71 Eastern Gas (old Dominion South) 1.12 1.24 Chicago Citygate 2.04 1.98 Algonquin Citygate 1.27 1.39 SoCal Citygate 5.19 6.02 Waha Hub 1.22 0.44 AECO 1.79 1.79 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day New England 38.500 31.00 PJM West 35.75 34.00 Ercot North 35.25 45.00 Mid C 240.00 135.00 Palo Verde 42.25 43.75 SP-15 43.50 46.00 (Reporting by Scott DiSavino; editing by Jonathan Oatis and David Gregorio)