UPDATE 2-US natgas eases to 1-month low on warmer forecasts, Freeport LNG worries

(Adds latest prices) March 23 (Reuters) - U.S. natural gas futures eased about 1% to a fresh one-month low on Thursday on a rise in output so far this month and afternoon forecasts for less cold weather and lower heating demand over the next two weeks than previously expected. In addition, worries that Freeport LNG' export plant in Texas was canceling cargoes and could take longer than previously expected to return to full service weighed on futures prices even though the amount of gas flowing to all big U.S. liquefied natural gas (LNG) export plants was on track to hit a record high this month. The price move also came after a federal report showing an expected storage withdrawal that was bigger than usual for this time of year because cold weather last week boosted demand for the fuel for heating. The U.S. Energy Information Administration (EIA) said utilities pulled 72 billion cubic feet (bcf) of gas from storage during the week ended March 17. That was close to the 75-bcf withdrawal analysts forecast in a Reuters poll and compares with a decrease of 55 bcf in the same week last year and a five-year (2018-2022) average decline of 45 bcf. Front-month gas futures for April delivery fell 1.7 cents, or 0.8%, to settle at $2.154 per million British thermal units (mmBtu), their lowest close since Feb. 21 when the contract closed at a 29-month low of $2.073. Freeport LNG's export plant was on track to pull in about 1.5 billion cubic feet per day (bcfd) of gas on Thursday, up from 1.1 bcfd on Wednesday, according to Refinitiv data. Freeport LNG said on March 8 that it anticipated feedgas flows would rise and fall as the plant returns to full production over the "next few weeks." When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export. The plant exited an eight-month outage in February. It shut in a fire in June 2022. Total gas flows to all seven of the big U.S. LNG export plants rose to an average of 13.1 bcfd so far in March from 12.8 bcfd in February. That would top the monthly record of 12.9 bcfd in March 2022, before the Freeport LNG facility shut. The seven big U.S. LNG export plants, including Freeport LNG, can turn about 13.8 bcfd of gas into LNG. SUPPLY AND DEMAND Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.5 bcfd so far in March, from 98.1 bcfd in February. That compares with a monthly record of 99.9 bcfd in November 2022. Analysts said production declined earlier this year due in part to gas price falls of 40% in January and 35% in December that persuaded several energy firms to reduce the number of rigs they were using to drill for gas. In addition, extreme cold in early February and late December cut gas output as some oil and gas wells in several producing basins froze. Meteorologists projected the weather in the Lower 48 states would remain mostly colder-than-normal through April 7. Refinitiv forecast U.S. gas demand, including exports, would slide from 114.7 bcfd this week to 108.7 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Wednesday. Week ended Week ended Year ago Five-year Mar 17 Mar 10 Mar 17 average (Actual) (Actual) Mar 17 U.S. weekly natgas storage change (bcf): -72 -58 -55 -45 U.S. total natgas in storage (bcf): 1,900 1,972 1,396 1,549 U.S. total storage versus 5-year average 22.7% 23.7% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2018-2022) Henry Hub 2.21 2.17 4.98 6.54 3.60 Title Transfer Facility (TTF) 13.41 12.69 41.81 40.50 14.39 Japan Korea Marker (JKM) 12.64 13.65 36.96 34.11 14.31 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 243 253 234 230 227 U.S. GFS CDDs 20 19 21 22 19 U.S. GFS TDDs 263 272 255 252 246 Refinitiv 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 98.7 98.4 98.5 94.3 89.4 U.S. Imports from Canada 7.7 7.8 8.0 9.0 8.6 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 106.4 106.2 106.5 103.3 99.1 U.S. Demand (bcfd) U.S. Exports to Canada 2.7 2.8 2.8 3.5 3.0 U.S. Exports to Mexico 5.6 5.1 5.2 5.5 5.2 U.S. LNG Exports 13.1 13.0 13.0 13.2 7.4 U.S. Commercial 14.0 13.1 11.1 10.1 12.4 U.S. Residential 22.3 20.6 17.2 14.3 19.6 U.S. Power Plant 30.4 29.2 29.4 24.1 25.7 U.S. Industrial 24.3 23.6 22.6 23.2 23.6 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.6 2.5 2.3 2.5 2.6 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 98.5 93.8 87.7 79.2 88.9 Total U.S. Demand 120.0 114.7 108.7 101.4 104.5 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Mar 24 Mar 17 Mar 10 Mar 3 Feb 24 Wind 15 15 12 13 15 Solar 3 3 3 3 3 Hydro 7 7 7 7 7 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 37 37 41 40 39 Coal 17 17 16 15 14 Nuclear 18 19 20 20 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.03 1.93 Transco Z6 New York 1.88 1.82 PG&E Citygate 9.22 7.45 Eastern Gas (old Dominion South) 1.79 1.69 Chicago Citygate 2.17 2.06 Algonquin Citygate 2.07 2.00 SoCal Citygate 9.75 11.33 Waha Hub 0.87 1.06 AECO 1.97 1.89 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 30.75 29.75 PJM West 27.75 28.00 Ercot North 27.00 19.00 Mid C 44.00 86.50 Palo Verde 64.25 63.25 SP-5 77.75 76.75 (Reporting by Scott DiSavino; Editing by Alexander Smith, Emelia Sithole-Matarise and Andrea Ricci)