UPDATE 1-US natgas prices plunge 13% on warmer forecasts for late January

(Adds latest prices) By Scott DiSavino Jan 16 (Reuters) - U.S. natural gas futures plunged about 13% to a one-week low on Tuesday on forecasts for demand to drop and output to rise once the weather turns warmer than normal in late January. Also weighing on prices, the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants dropped on Monday to a three-month low. Still, spot power and gas prices soared to multi-year highs as extremely cold weather cut gas supplies and was on track to boost daily demand to a record high. "It appears that the run-up last week may have been overly reactive to news of the cold. As the adage goes, 'buy the rumor, sell the news' and today appears to be the latter half on full display," analysts at energy consulting firm Gelber and Associates told customers in a note explaining the massive drop in futures prices. Last week, futures jumped about 15% for a second week in a row due primarily to worries about what this week's extreme cold would do to gas supplies and demand. The futures market is trading for February, when analysts said the country should have enough production and gas in storage to meet at least normal weather conditions without boosting prices much. Front-month gas futures for February delivery on the New York Mercantile Exchange fell 41.3 cents, or 12.5%, to settle at $2.900 per million British thermal units (mmBtu), their lowest close since Jan. 5 and the front-month's biggest daily percentage drop since it fell about 15% on March 6, 2023. In the spot market, power prices at the Mid-Columbia hub in Oregon soared to a record high of $1,075 per megawatt hour. Next-day gas prices jumped to $10.40 per mmBtu at the Eastern Gas South hub in Pennsylvania, their highest since July 2008, and $9.72 at the AECO hub in Alberta in Canada, their highest since February 2014. SUPPLY AND DEMAND Financial company LSEG said average gas output in the Lower 48 states fell to 103.9 billion cubic feet per day (bcfd) so far in January from a monthly record of 108.0 bcfd in December. On a daily basis, output fell by 14.9 bcfd from Jan. 8-15 to a 12-month low of 92.8 bcfd on Monday. That drop was less than losses of 19.6 bcfd during Winter Storm Elliott in December 2022 and 20.4 bcfd during the February freeze in 2021. Meteorologists projected temperatures in the Lower 48 states would switch from colder than normal from Jan. 16-21 to mostly warmer than normal from Jan. 22-31. With warmer weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would drop from 154.1 bcfd this week to 138.8 bcfd next week. The forecast for this week was lower than LSEG's outlook on Monday. On a daily basis, LSEG projected total gas demand, including exports, would reach 170.0 bcfd on Tuesday, lower than LSEG forecast on Monday but still exceeding the all-time high of 162.5 bcfd set on Dec. 23, 2022, during Winter Storm Elliott, according to federal energy data from S&P Global Commodities Insights. Gas flows to the seven big U.S. LNG export plants slid to an average of 14.4 bcfd so far in January from a monthly record of 14.7 bcfd in December. On a daily basis, LNG feedgas dropped to a three-month low of 11.7 bcfd on Monday due mostly to reductions at U.S. energy company Cheniere Energy's Sabine Pass in Louisiana and Freeport LNG's plant in Texas. Week ended Week ended Year ago Five-year Jan 12 Jan 5 Jan 12 average Forecast Actual Jan 12 U.S. weekly natgas storage change (bcf): -123 -140 -68 -126 U.S. total natgas in storage (bcf): 3,213 3,336 2,832 2,862 U.S. total storage versus 5-year average 12.3% 11.6% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2023 (2018-2022) Henry Hub 2.97 3.31 3.42 2.66 3.60 Title Transfer Facility (TTF) 9.78 9.59 19.79 13.04 14.39 Japan Korea Marker (JKM) 10.66 11.25 24.34 14.39 14.31 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 433 448 391 438 444 U.S. GFS CDDs 3 3 3 3 3 U.S. GFS TDDs 436 451 394 441 447 LSEG U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year (2019-2023) Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 106.9 98.2 99.8 101.8 93.8 U.S. Imports from Canada8 9.2 9.0 8.4 9.2 9.3 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.3 Total U.S. Supply 116.1 107.2 108.2 111.0 103.4 U.S. Demand (bcfd) U.S. Exports to Canada 2.9 1.7 2.0 2.5 2.7 U.S. Exports to Mexico 6.1 4.9 5.5 5.3 5.3 U.S. LNG Exports 14.8 13.1 13.0 12.5 8.9 U.S. Commercial 16.4 22.4 18.5 14.7 16.6 U.S. Residential 27.8 39.4 31.6 24.1 28.6 U.S. Power Plant 34.7 35.9 33.7 29.4 29.5 U.S. Industrial 25.6 28.0 26.3 24.5 25.6 U.S. Plant Fuel 5.3 4.8 4.9 5.0 5.4 U.S. Pipe Distribution 3.0 3.6 3.1 3.6 2.9 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 113.0 134.3 118.4 101.4 108.7 Total U.S. Demand 136.7 154.1 138.8 121.7 125.6 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021 % of Normal % of Normal % of Normal % of Normal % of Normal Forecast Forecast Actual Actual Actual Apr-Sep 81 81 83 107 81 Jan-Jul 80 80 77 102 79 Oct-Sep 81 82 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Jan 19 Jan 12 Jan 5 Dec 29 Dec 22 Wind 13 8 11 11 Solar 2 2 2 2 Hydro 6 6 7 6 Other 2 2 2 2 Petroleum 0 0 0 0 Natural Gas 38 42 40 41 Coal 19 19 16 18 Nuclear 19 20 22 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 13.20 3.15 Transco Z6 New York 13.25 2.65 PG&E Citygate 16.18 5.89 Eastern Gas (old Dominion South) 10.40 2.45 Chicago Citygate 23.35 3.00 Algonquin Citygate 16.25 3.24 SoCal Citygate 13.30 5.53 Waha Hub 17.23 2.47 AECO 9.72 2.68 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 60.75 44.25 PJM West 54.00 34.50 Ercot North 19.00 22.25 Mid C 1075.00 850.00 Palo Verde 123.00 59.25 SP-15 125.25 63.00 (Reporting by Scott DiSavino; Editing by Bernadette Baum and David Gregorio)