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UPDATE 1-U.S. natgas futures jump 9% on output drop, hotter forecasts

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(Updates to settlement) July 13 (Reuters) - U.S. natural gas futures jumped about 9% to a three-week high on Wednesday on a drop in daily gas output over the past few days and forecasts for hotter weather and more demand over the next two weeks than previously expected. That heat has already boosted power demand to record levels in several parts of the country as homes and businesses crank up their air conditioners, including in Texas where the power grid operator asked consumers to conserve energy on Wednesday to help avoid widespread outages. Traders noted prices were up despite the ongoing outage at Freeport LNG's liquefied natural gas (LNG) export plant in Texas, which has left more gas in the United States for utilities to refill low stockpiles for the winter. Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8. Freeport LNG has said the facility could return by October. Some analysts, however, think the plant could remain shut for longer. After weeks of rising volatility, front-month gas futures for August delivery on the New York Mercantile Exchange rose 52.6 cents, or 8.5%, to settle at $6.689 per million British thermal units (mmBtu), their highest close since June 22. Gas market close-to-close volatility over the past 30 days rose to its highest since March. Volatility hit a record high in February. With the U.S. Federal Reserve expected to keep raising interest rates, open interest in NYMEX futures fell on Tuesday to its lowest since July 2016 as investors cut back on risky assets like commodities. So far this year, the front-month is up about 79% as much higher prices in Europe and Asia keep demand for U.S. LNG exports strong, especially since Russia's Feb. 24 invasion of Ukraine stoked fears Moscow would cut gas supplies to Europe. Gas was trading around $54 per mmBtu in Europe, which is a four-month high, and $39 in Asia . Russian gas exports on the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route - dropped to 1.3 bcfd on Tuesday from 1.6 bcfd on Monday due to the shutdown of Nord Stream for maintenance on July 11. That compares with around 3.7 bcfd over the past month, 6.5 bcfd in early June and an average of 9.4 bcfd in July 2021. The group operating Nord Stream said the pipe should return around July 21. Analysts, however, said the outage could last longer. TOP PRODUCER U.S. futures lag far behind global prices because the United States is the world's top producer, with all the gas it needs for domestic use, while capacity constraints limit LNG exports. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 96.0 bcfd so far in July from 95.3 bcfd in June. That compares with a monthly record high of 96.1 bcfd in December 2021. On a daily basis, however, U.S. output was on track to drop by 2.4 bcfd over the past three days to a preliminary 11-week low of 94.1 bcfd on Wednesday. Preliminary data is often revised later in the day. With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 98.8 bcfd this week to 99.5 bcfd next week. Those forecasts were higher than Refinitiv's outlook on Tuesday. The average amount of gas flowing to U.S. LNG export plants slid to 11.1 bcfd so far in July from 11.2 bcfd in June. That was down from 12.5 bcfd in May and a monthly record of 12.9 bcfd in March due to the Freeport outage. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG. Week ended Week ended Year ago Five-year Jul 8 Jul 1 Jul 8 average (Forecast) (Actual) Jul 8 U.S. weekly natgas storage change (bcf): +58 +60 +49 +55 U.S. total natgas in storage (bcf): 2,369 2,311 2,621 2,688 U.S. total storage versus 5-year average -11.9% -12.2% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 6.48 6.16 3.82 3.73 2.89 Title Transfer Facility (TTF) 53.75 51.47 12.49 16.04 7.49 Japan Korea Marker (JKM) 38.63 38.84 13.77 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 2 2 3 3 3 U.S. GFS CDDs 241 238 202 212 205 U.S. GFS TDDs 243 240 205 215 208 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 96.2 95.8 96.3 92.9 85.6 U.S. Imports from Canada 7.7 7.9 7.9 8.1 8.1 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 103.9 103.7 104.1 101.0 93.8 U.S. Demand (bcfd) U.S. Exports to Canada 2.3 2.0 2.0 2.3 2.3 U.S. Exports to Mexico 6.0 6.1 6.1 6.7 5.2 U.S. LNG Exports 11.2 11.1 10.8 10.8 4.5 U.S. Commercial 4.3 4.3 4.4 4.4 4.4 U.S. Residential 3.5 3.5 3.5 3.5 3.6 U.S. Power Plant 41.1 43.6 44.3 38.0 39.6 U.S. Industrial 21.1 21.3 21.4 20.9 20.8 U.S. Plant Fuel 4.8 4.7 4.8 4.7 4.7 U.S. Pipe Distribution 2.0 2.1 2.1 2.0 2.0 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 77.0 79.6 80.6 73.6 75.2 Total U.S. Demand 96.4 98.8 99.5 93.4 87.2 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Jul 15 Jul 8 Jul 1 Jun 24 Jun 17 Wind 12 Solar 3 Hydro 7 Other 2 Petroleum 0 Natural Gas 38 Coal 20 Nuclear 17 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 6.81 6.82 Transco Z6 New York 6.22 6.26 PG&E Citygate 7.54 7.36 Dominion South 5.87 5.80 Chicago Citygate 6.39 6.42 Algonquin Citygate 6.34 6.31 SoCal Citygate 7.57 7.50 Waha Hub 6.32 6.44 AECO 3.43 3.20 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day New England 72.75 70.75 PJM West 102.75 99.00 Ercot North 280.00 130.00 Mid C 33.00 81.00 Palo Verde 76.50 76.75 SP-15 77.75 78.75 (Reporting by Scott DiSavino; Editing by Kirsten Donovan)