UPDATE 1-US natgas prices climb 4% to one-week high with rising demand

(Adds latest prices) By Scott DiSavino Dec 15 (Reuters) - U.S. natural gas futures climbed about 4% to a one-week high on Friday on forecasts for higher demand next week than previously expected and as record amounts of gas flow to liquefied natural gas (LNG) export plants. That price increase came despite record gas production and forecasts for mild weather and lower heating demand in two weeks that should allow utilities to keep pulling less gas from storage than usual through the end of December. Analysts forecast there was currently around 8.7% more gas in storage than usual for this time of year. Front-month gas futures for January delivery on the New York Mercantile Exchange (NYMEX) rose 9.9 cents, or 4.1%, to settle at $2.491 per million British thermal units (mmBtu), their highest close since Dec. 8. That gain - the third daily price increase in a row - pushed the front-month out of technically oversold territory for the first time in eight days. The contract, however, was still down about 3% this week, putting it down for a sixth week in a row for the first time since February. Record production and ample gas in storage weighted on futures prices for weeks and prompted some traders to forecast that prices already peaked this winter (November-March) in November. Investor interest in trading gas has increased in recent weeks with open interest in NYMEX futures on Dec. 13 at a 26-month high of 1.423 million contracts and shares outstanding in the U.S. Natural Gas Fund (UNG) at a record 197.9 million contracts. UNG is an Exchange Traded Fund (ETF) designed to track the daily price movements of gas. Analysts, meanwhile, said they expect U.S. prices to rise in coming years as new LNG export plants enter service in the U.S., Canada and Mexico to meet rising global demand for the fuel. But expected delays at LNG export plants being built by Exxon Mobil/QatarEnergy at Golden Pass in Texas and Venture Global LNG at Plaquemines in Louisiana have caused some analysts to reduce their forecasts for U.S. as demand and prices in 2024. SUPPLY AND DEMAND Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 108.5 bcfd so far in December from a record 108.3 bcfd in November. Meteorologists projected the weather would remain mostly warmer than normal through at least Dec. 30. But even though the weather will remain mild, LSEG forecast U.S. gas demand in the Lower 48, including exports, would rise from 125.1 bcfd this week 127.7 bcfd next week with the usual seasonal cooling at this time of year before sliding to 124.1 bcfd during the last week of the year when many businesses and government offices shut for the Christmas holiday. The forecast for next week was higher than LSEG's outlook on Thursday. Gas flows to the seven big U.S. LNG export plants rose to an average of 14.5 bcfd so far in December, up from a record 14.3 bcfd in November. Week ended Week ended Year ago Five-year Dec 15 Dec 8 Dec 15 average Forecast Actual Dec 15 U.S. weekly natgas storage change (bcf): -80 -55 -82 -107 U.S. total natgas in storage (bcf): 3,584 3,664 3,337 3,297 U.S. total storage versus 5-year average 8.7% 7.6% 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 2.40 2.39 5.77 6.54 2.89 Title Transfer Facility (TTF) 10.83 11.13 36.68 40.50 7.49 Japan Korea Marker (JKM) 15.33 15.46 32.34 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 334 330 475 387 416 U.S. GFS CDDs 1 1 3 5 4 U.S. GFS TDDs 335 331 378 392 420 LSEG U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year (2018-2022) Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 108.1 108.9 108.6 102.8 94.2 U.S. Imports from Canada8 8.8 8.6 8.7 10.0 9.1 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2 Total U.S. Supply 116.9 117.5 117.3 112.8 103.5 U.S. Demand (bcfd) U.S. Exports to Canada 3.3 3.4 3.4 3.4 3.2 U.S. Exports to Mexico 3.9 3.8 4.6 5.2 5.0 U.S. LNG Exports 14.5 14.7 14.9 12.6 8.6 U.S. Commercial 13.2 13.8 14.1 15.4 14.6 U.S. Residential 20.9 22.3 22.8 25.8 24.7 U.S. Power Plant 33.2 34.2 34.9 30.4 28.6 U.S. Industrial 24.3 24.6 24.8 24.7 25.0 U.S. Plant Fuel 5.3 5.4 5.4 5.3 5.3 U.S. Pipe Distribution 2.7 2.7 2.8 2.7 2.9 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 99.8 103.2 104.9 104.4 101.2 Total U.S. Demand 121.4 125.1 127.7 125.6 118.0 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 83 83 107 81 Jan-Jul 81 81 77 102 79 Oct-Sep 81 82 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Dec 15 Dec 8 Dec 1 Nov 24 Nov 17 Wind 11 12 10 11 9 Solar 3 3 3 3 3 Hydro 6 5 6 6 6 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 41 40 42 39 42 Coal 17 17 17 16 17 Nuclear 20 21 20 22 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.39 2.33 Transco Z6 New York 1.74 2.04 PG&E Citygate 3.85 4.22 Eastern Gas (old Dominion South) 1.64 1.74 Chicago Citygate 2.12 2.02 Algonquin Citygate 2.02 3.20 SoCal Citygate 3.60 4.25 Waha Hub 1.94 1.85 AECO 1.25 1.23 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 28.25 35.50 PJM West 32.50 38.25 Ercot North 22.00 23.50 Mid C 51.00 62.13 Palo Verde 52.25 56.25 SP-15 54.50 54.50 (Reporting by Scott DiSavino; editing by Diane Craft )