UPDATE 1-US natgas futures fall 3% to 30-month low on mild weather forecasts

(Adds latest prices) March 28 (Reuters) - U.S. natural gas futures fell about 3% on Tuesday to a 30-month low on rising output and mild weather forecasts that should allow utilities to start injecting gas into storage at the beginning of April. "A shift toward milder temperature expectations during recent days has contributed to much of the price weakness," analysts at energy consulting firm Ritterbusch and Associates told customers in a note. "Add in a lift in production back toward a record pace ... and conditions have been ripe for this price slide." The price decline came even though the amount of gas flowing to liquefied natural gas (LNG) export plants was on track to hit a monthly record high in March after Freeport LNG's export plant in Texas exited an eight-month outage in February. Freeport LNG shut in June 2022 due to a fire. On their second to last day as the front-month, gas futures for April delivery on the New York Mercantile Exchange fell 5.8 cents, or 2.8%, to settle at $2.030 per million British thermal units (mmBtu), their lowest since September 2020. That put the front-month close to the psychologically significant $2 per mmBtu that could trigger numerous option contracts. "Stops would very likely be elected versus violation of the big whole number versus $2," said Bob Yawger at Mizuho, a bank. With April expected to expire on Wednesday and the May contract trading about 13 cents higher than futures for April, Yawger said "there is a chance the roll can save natural gas from sliding over the $2 cliff if (it) can just hang in there until after tomorrow's expiration." Futures for May, which will soon be the front-month, fell about 7 cents to settle at $2.15 per mmBtu. The market has been extremely volatile this month, with the front-month gaining or losing more than 5% on nine of the past 19 trading days. So far this year, gas prices were down about 53%. Freeport LNG's export plant was on track to pull in about 1.6 billion cubic feet per day (bcfd) of gas on Tuesday, up from 1.2 bcfd on Monday, according to Refinitiv data. On March 8, Freeport LNG said it anticipated feedgas flows would rise and fall as the plant returns to full production over the "next few weeks." Sources familiar with the plant said Freeport LNG had canceled some cargoes for March due to issues with one of three liquefaction trains, and noted the facility could take longer than the company expects to return to full service. Liquefaction trains turn gas into LNG for export. When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export. Total gas flows to all seven big U.S. LNG export plants rose to an average of 13.1 bcfd so far in March, up 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. 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. The monthly record is 99.9 bcfd in November 2022. Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through April 12. With warmer spring-like weather expected to reduce the amount of gas burned to heat homes and businesses, Refinitiv forecast U.S. gas demand, including exports, would drop from 110.3 bcfd this week to 103.9 bcfd next week. Those forecasts, however, were higher than Refinitiv's outlook on Monday as LNG exports rise. Mild winter weather allowed utilities to leave more gas in storage so far this year and should let them start injecting fuel into inventories at the beginning of April. Gas stockpiles were about 23% above their five-year average (2018-2022) during the week ended March 17 and were expected to end about 20% above normal during the colder-than-normal week ended March 24, according to federal data and analysts' estimates. Week ended Week ended Year ago Five-year Mar 24 Mar 17 Mar 24 average (Forecast) (Actual) Mar 24 U.S. weekly natgas storage change (bcf): -55 -72 +15 -17 U.S. total natgas in storage (bcf): 1,845 1,900 1,411 1,532 U.S. total storage versus 5-year average 20.4% 22.7% 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 2.06 2.09 4.98 6.54 3.60 Title Transfer Facility (TTF) 13.32 13.13 41.81 40.50 14.39 Japan Korea Marker (JKM) 12.53 12.70 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 212 216 235 211 207 U.S. GFS CDDs 29 28 25 25 22 U.S. GFS TDDs 241 244 260 236 229 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 98.5 98.9 99.1 94.6 89.4 U.S. Imports from Canada 7.8 7.1 7.9 9.7 8.6 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 106.2 106.1 106.9 104.3 99.1 U.S. Demand (bcfd) U.S. Exports to Canada 2.8 2.8 2.8 3.2 3.0 U.S. Exports to Mexico 4.8 5.1 5.1 5.4 5.2 U.S. LNG Exports 13.0 13.0 13.5 12.9 7.4 U.S. Commercial 13.1 11.5 9.8 12.1 12.4 U.S. Residential 20.6 17.7 14.3 18.1 19.6 U.S. Power Plant 29.0 29.9 29.1 25.0 25.7 U.S. Industrial 23.6 22.8 22.0 23.7 23.6 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.5 2.4 2.2 2.5 2.6 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 93.7 89.4 82.4 86.4 88.9 Total U.S. Demand 114.3 110.3 103.9 107.9 104.5 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Mar 31 Mar 24 Mar 17 Mar 10 Mar 3 Wind 14 14 15 12 13 Solar 4 3 3 3 3 Hydro 7 7 7 7 7 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 38 37 37 41 40 Coal 16 17 16 16 15 Nuclear 20 18 19 20 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.04 2.04 Transco Z6 New York 1.96 1.92 PG&E Citygate 6.87 6.72 Eastern Gas (old Dominion South) 1.80 1.69 Chicago Citygate 2.19 2.13 Algonquin Citygate 2.19 1.95 SoCal Citygate 9.50 9.50 Waha Hub 1.21 0.63 AECO 1.96 2.01 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 33.50 35.00 PJM West 30.25 23.50 Ercot North 28.75 29.75 Mid C 86.20 105.00 Palo Verde 57.00 35.50 SP-15 55.50 32.25 (Reporting by Scott DiSavino; Editing by Bernadette Baum and Jonathan Oatis)