UPDATE 2-U.S. natgas falls 5% on big storage build, lower demand forecast

(Adds latest prices) Nov 3 (Reuters) - U.S. natural gas futures fell about 5% on Thursday on a bigger-than-expected storage build and forecasts for lower demand over the next two weeks than previously expected. Those lower demand forecasts should allow utilities to keep adding gas into storage for a few weeks beyond the usual Oct. 31 end of the injection season. The U.S. Energy Information Administration (EIA) said utilities added 107 billion cubic feet (bcf) of gas to storage during the week ended Oct. 28. Analysts said the build was bigger-than-normal primarily because the weather last week was mild, keeping heating demand low. That was higher than the 97-bcf build analysts forecast in a Reuters poll and compares with an increase of 66 bcf in the same week last year and a five-year (2017-2021) average increase of 45 bcf. Gas futures declined despite forecasts for colder weather that should boost heating demand in mid- to late November, a drop in output so far this month and expectations gas demand will rise once the Freeport liquefied natural gas (LNG) export plant in Texas exits an outage. Freeport LNG expects its 2.1-billion-cubic-feet-per-day (bcfd) export plant to return to at least partial service in early to mid-November following an unexpected shutdown on June 8 caused by a pipeline explosion. At least three vessels were lined up to pick up LNG at Freeport, based on Refinitiv data. Prism Brilliance and Prism Diversity were waiting off the coast from the plant, and Prism Courage was expected to arrive on Friday. In what has been an extremely volatile week, front-month gas futures fell 29.3 cents, or 4.7%, to settle at $5.975 per million British thermal units (mmBtu). That follows a rise of 12% on Monday, a drop of 10% on Tuesday and a rise of 10% on Wednesday. Overall, U.S. gas futures are still up about 60% so far this year as much higher global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading at $36 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $28 at the Japan Korea Marker (JKM) in Asia. TOP PRODUCER U.S. gas futures lag far behind global prices because the United States is the world's top producer with all the fuel it needs for domestic use, while capacity constraints and the Freeport outage have prevented the country from exporting more LNG. Data provider Refinitiv said that average gas output in the U.S. Lower 48 states fell to 97.8 bcfd so far in November, down from a record 99.4 bcfd in October. Traders, however, noted that early-month output figures were usually revised higher later in the month. With the coming of seasonally cooler weather, Refinitiv projected that average U.S. gas demand, including exports, would rise from 97.6 bcfd this week to 99.5 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Wednesday. The average amount of gas flowing to U.S. LNG export plants rose to 11.5 bcfd so far in November with the return of Berkshire Hathaway Energy's Cove Point export plant in Maryland from a maintenance outage, from 11.3 bcfd in October. That is still well below the monthly record of 12.9 bcfd in March due mostly to the ongoing outage at Freeport. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG. During the first 10 months of 2022, roughly 66%, or 7.0 bcfd, of U.S. LNG exports went to Europe, as shippers diverted cargoes from Asia to get higher prices. Last year, just 29%, or about 2.8 bcfd, of U.S. LNG exports went to Europe. Week ended Week ended Year ago Five-year Oct 28 Oct 21 Oct 28 average (Actual) (Actual) Oct 28 U.S. weekly natgas storage change (bcf): +107 +52 +66 +45 U.S. total natgas in storage (bcf): 3,501 3,394 3,602 3,636 U.S. total storage versus 5-year average -3.7% -5.5% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 6.03 6.27 5.12 3.73 2.89 Title Transfer Facility (TTF) 37.25 38.55 27.71 16.04 7.49 Japan Korea Marker (JKM) 29.11 27.54 32.98 18.00 8.95 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 235 203 221 228 248 U.S. GFS CDDs 20 22 9 20 15 U.S. GFS TDDs 255 225 230 248 263 Refinitiv 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 99.1 98.9 99.0 95.8 89.6 U.S. Imports from Canada 7.5 7.3 7.7 8.7 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 106.7 106.2 106.7 104.5 97.9 U.S. Demand (bcfd) U.S. Exports to Canada 2.5 2.6 2.9 2.6 2.9 U.S. Exports to Mexico 5.5 5.4 5.6 5.4 5.1 U.S. LNG Exports 11.4 11.9 11.7 10.6 6.4 U.S. Commercial 7.5 7.9 8.6 9.8 11.5 U.S. Residential 9.4 10.4 12.1 13.8 17.2 U.S. Power Plant 28.4 29.7 28.8 29.3 26.0 U.S. Industrial 22.6 22.6 22.7 23.2 24.0 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.0 2.1 2.1 2.1 2.1 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 74.8 77.7 79.3 83.2 85.8 Total U.S. Demand 94.2 97.6 99.5 101.8 100.2 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Nov 4 Oct 28 Oct 21 Oct 14 Oct 7 Wind 8 15 11 11 9 Solar 3 3 3 4 4 Hydro 5 5 5 5 6 Other 2 2 3 3 2 Petroleum 0 0 0 0 0 Natural Gas 41 37 39 41 41 Coal 20 18 19 18 18 Nuclear 20 19 19 19 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 4.58 4.57 Transco Z6 New York 3.16 3.13 PG&E Citygate 8.21 7.85 Dominion South 2.90 2.96 Chicago Citygate 3.48 3.28 Algonquin Citygate 3.63 3.65 SoCal Citygate 7.40 7.72 Waha Hub 2.15 2.37 AECO 4.08 4.05 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 50.50 42.75 PJM West 46.25 56.75 Ercot North 34.00 32.50 Mid C 72.00 74.25 Palo Verde 55.00 62.50 SP-15 69.25 73.25 (Reporting by Scott DiSavino; editing by Jane Merriman, Kirsten Donovan)