UPDATE 1-US natgas prices up 3% to 14-week high on rising demand for LNG feedgas

(Adds latest prices) By Scott DiSavino May 6 (Reuters) - U.S. natural gas futures gained about 3% to a 14-week high on Monday on forecasts for higher demand over the next two weeks than previously expected as feedgas to liquefied natural gas (LNG) export plants increased with the return of Freeport LNG in Texas. Prices were also supported by an ongoing decline in output. Front-month gas futures for June delivery on the New York Mercantile Exchange rose 5.3 cents, or 2.5%, to settle at $2.195 per million British thermal units (mmBtu), the highest close since Jan. 29 for a second day in a row. U.S. gas production was down about 9% so far in 2024 after 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. In the spot market, meanwhile, analysts said upcoming gas pipeline maintenance on U.S. energy company Kinder Morgan's Permian Highway Pipeline from May 7-12 and Gulf Coast Express from May 14-21 could push average next-day gas prices at the Waha Hub in West Texas back into negative territory for the first time since mid-April. Reductions on those and other pipes in Texas over the past month or so trapped gas in the Permian Shale and helped push Waha prices below zero for several days last month. SUPPLY AND DEMAND Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 96.9 billion cubic feet per day (bcfd) so far in May, down from 98.1 bcfd in April. That compares with a monthly record of 105.5 bcfd in December 2023. Meteorologists projected weather across the Lower 48 states would go from warmer than normal from May 6-9 to near-normal from May 10-17 before switching back to warmer than normal from May 18-21. LSEG forecast gas demand in the Lower 48, including exports, would slide from 93.4 bcfd this week to 91.0 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday. Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 bcfd in April to 12.4 bcfd so far in May with the slow return of Freeport. That compares with a monthly record of 14.7 bcfd in December. The amount of gas flowing to the 2.1-bcfd Freeport hit a two-month high of 1.4 bcfd on Sunday, up from 1.2 bcfd on Saturday and an average of 0.4 bcfd in April. The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's war in Ukraine. Gas was trading around $10 per mmBtu at both the Dutch Title Transfer Facility (TTF) benchmark in Europe and the Japan Korea Marker (JKM) benchmark in Asia. Week ended Week ended Year ago Five-year May 3 Apr 26 May 3 average Forecast Actual May 3 U.S. weekly natgas storage change (bcf): +89 +59 +71 +81 U.S. total natgas in storage (bcf): 2,573 2,484 2,119 1,923 U.S. total storage versus 5-year average 33.8% 34.9% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year Last Year Average Average 2023 (2018-2022) Henry Hub 2.17 2.14 2.30 2.66 3.60 Title Transfer Facility (TTF) 9.74 9.50 9.97 13.04 14.39 Japan Korea Marker (JKM) 10.47 10.41 10.45 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 50 55 48 75 73 U.S. GFS CDDs 83 76 83 73 73 U.S. GFS TDDs 133 131 131 148 146 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 96.8 97.2 97.2 102.4 94.4 U.S. Imports from Canada 7.2 7.1 6.7 7.3 7.5 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0 Total U.S. Supply 103.9 104.4 103.8 109.7 101.9 U.S. Demand (bcfd) U.S. Exports to Canada 2.1 2.1 2.0 1.8 2.4 U.S. Exports to Mexico 5.8 5.4 6.1 6.3 5.6 U.S. LNG Exports 12.3 12.4 12.3 13.0 8.8 U.S. Commercial 5.9 5.6 5.3 5.4 5.8 U.S. Residential 6.3 6.0 5.1 5.8 6.9 U.S. Power Plant 30.6 33.2 31.5 31.0 28.4 U.S. Industrial 21.8 21.8 21.8 21.4 21.5 U.S. Plant Fuel 4.8 4.8 4.8 4.8 4.8 U.S. Pipe Distribution 1.9 2.0 1.9 1.9 1.9 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 71.5 73.5 70.6 70.4 69.4 Total U.S. Demand 91.8 93.4 91.0 91.5 86.2 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 77 78 83 107 81 Jan-Jul 78 79 77 102 79 Oct-Sep 80 80 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended May 10 May 3 Apr 26 Apr 19 Apr 12 Wind 14 14 16 16 16 Solar 5 6 6 6 6 Hydro 7 7 7 7 7 Other 2 2 1 2 1 Petroleum 0 0 0 0 0 Natural Gas 40 40 37 37 37 Coal 13 13 13 13 13 Nuclear 19 19 19 20 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 1.67 1.66 Transco Z6 New York 1.44 1.37 PG&E Citygate 2.21 2.35 Eastern Gas (old Dominion South) 1.32 1.32 Chicago Citygate 1.46 1.44 Algonquin Citygate 1.43 1.41 SoCal Citygate 1.45 1.50 Waha Hub 0.25 0.96 AECO 0.92 1.00 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 25.00 24.00 PJM West 29.00 37.00 Ercot North 21.75 40.25 Mid C 33.50 60.00 Palo Verde 11.75 8.50 SP-15 12.50 9.50 (Reporting by Scott DiSavino; editing by Jonathan Oatis and David Gregorio)