US natgas prices edge up 1% on heat forecasts, soaring global gas prices

Sept 8 (Reuters) - U.S. natural gas futures edged up about 1% to a one-week high on Friday on forecasts of hotter than normal weather through at least late September and a jump in global gas prices due to worries about a strike at U.S. energy firm Chevron's liquefied natural gas (LNG) export projects in Australia. Front-month gas futures for October delivery on the New York Mercantile Exchange rose 3.3 cents, or 1.3%, to $2.612 per million British thermal units (mmBtu) at 9:34 a.m. EDT (1334 GMT), putting the contract on track for their highest close since Sept. 1. For the week, the U.S. contract was down about 6% after rising about 9% last week. In Europe, gas futures jumped 16% to a one-week high around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark after workers at Chevron's LNG projects in Australia went on strike on Friday after talks broke down. Australia is one of the world's three biggest LNG producers. The other two are Qatar and the U.S. Chevron's Australia facilities account for over 5% of global supply. In Texas, where homes and businesses have cranked up their air conditioners to escape a brutal heat wave this week, the Electric Reliability Council of Texas (ERCOT), the state's power grid operator, passed another reliability test after urging consumers to conserve energy for a second day in a row on Thursday. Earlier in the week, ERCOT warned that rotating outages were possible. In the event, there were no power outages due to the grid operator's actions, but ERCOT's efforts to maintain reliability by boosting supplies and reducing demand helped boost real-time prices to over $4,000 per megawatt hour (MWh) for more than an hour Thursday evening after hitting the grid's $5,000 price cap for about an hour Wednesday night. Next-day power prices at the ERCOT North hub , which includes Dallas, jumped to a two-week high of $611 per MWh for Friday from $537 for Thursday. That compares with an average of $101 so far this year, $78 in 2022 and a five-year (2018-2022) average of $66 per MWh. And the Texas scorcher is not over yet. High temperatures in Houston, the biggest city in Texas, will reach 105 degrees Fahrenheit (40.6 Celsius) on Friday, breaking the day's record of 97 F set in 1999, according to AccuWeather. That compares with a normal high of 91 F for this time of year. ERCOT expects power use to peak at 84,880 megawatts on Friday, breaking the record high for the month of September for a fifth day in a row. The grid hit its all-time high of 85,435 MW on Aug. 10. Extreme heat requires utilities to burn more gas to keep air conditioners humming, especially in Texas. In 2022, about 49% of the state's power came from gas-fired plants, with most of the rest coming from wind (22%), coal (16%), nuclear (8%) and solar (4%), federal energy data showed. SUPPLY AND DEMAND Financial firm LSEG said average gas output in the lower 48 U.S. states eased to 102.1 billion cubic feet per day (bcfd) so far in September, down from a record 102.3 bcfd in August. On a daily basis, however, output was on track to drop about 3.0 bcfd over the past four days to a preliminary 12-week low of 100.1 bcfd on Friday. Energy traders, however, noted preliminary data is often revised later in the day. Meteorologists forecast temperatures will remain mostly higher than normal through at least Sept. 23. But with a seasonal cooling of the weather, LSEG forecast U.S. gas demand, including exports, will hold near 101.1 bcfd this week and next before sliding to 96.9 bcfd in two weeks. 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 13.1 bcfd so far in September from 12.3 bcfd in August. That compares with a monthly record of 14.0 bcfd in April. Week ended Week ended Year ago Five-year Sep 8 Sep 1 Sep 8 average Forecast Actual Sep 8 U.S. weekly natgas storage change (bcf): 52 33 74 76 U.S. total natgas in storage (bcf): 3,200 3,148 2,760 3,002 U.S. total storage versus 5-year average 6.6% 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 2.62 2.58 7.76 6.54 2.89 Title Transfer Facility (TTF) 11.38 9.57 57.90 40.50 7.49 Japan Korea Marker (JKM) 13.32 13.21 46.99 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 14 12 6 19 30 U.S. GFS CDDs 147 157 154 146 122 U.S. GFS TDDs 161 169 160 165 152 LSEG 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 102.1 102.3 102.0 100.0 92.6 U.S. Imports from Canada 7.2 7.5 7.7 8.6 7.8 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0 Total U.S. Supply 109.3 109.8 109.7 108.6 100.4 U.S. Demand (bcfd) U.S. Exports to Canada 1.5 2.0 2.0 2.2 2.4 U.S. Exports to Mexico 7.0 6.9 7.0 5.5 5.6 U.S. LNG Exports 12.5 13.2 13.1 11.0 6.5 U.S. Commercial 4.5 4.3 4.7 4.5 4.9 U.S. Residential 3.6 3.6 3.8 3.6 3.9 U.S. Power Plant 46.0 42.3 41.6 41.3 34.9 U.S. Industrial 21.6 21.4 21.5 21.4 21.5 U.S. Plant Fuel 5.0 5.1 5.0 5.0 5.0 U.S. Pipe Distribution 2.2 2.1 2.1 2.2 2.2 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 83.1 79.1 78.9 78.1 72.5 Total U.S. Demand 104.1 101.1 101.0 96.8 87.0 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2022 2021 2020 % of Normal % of Normal % of Normal % of Normal % of Normal Forecast Forecast Actual Actual Actual Apr-Sep 83 83 107 81 103 Jan-Jul 77 77 102 79 98 Oct-Sep 76 76 103 81 95 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Sep 8 Sep 1 Aug 25 Aug 18 Aug 1 Wind 10 6 7 7 7 Solar 4 4 4 4 4 Hydro 5 6 5 6 5 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 42 45 45 45 45 Coal 19 19 20 19 19 Nuclear 17 18 17 17 17 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.45 2.49 Transco Z6 New York 1.95 2.13 PG&E Citygate 3.83 3.84 Eastern Gas (old Dominion South) 1.60 1.58 Chicago Citygate 2.30 2.28 Algonquin Citygate 2.32 2.52 SoCal Citygate 4.30 3.15 Waha Hub 2.14 2.00 AECO 1.77 1.77 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day New England 57.50 96.25 PJM West 39.00 57.50 Ercot North 611.00 536.50 Mid C 77.30 55.75 Palo Verde 52.25 40.50 SP-15 53.25 41.75 (Reporting by Scott DiSavino; editing by Philippa Fletcher)