TABLE-US natgas prices soar 11% as supplies decline, demand rises

By Scott DiSavino Feb 21 (Reuters) - U.S. natural gas futures soared by about 11% on Wednesday after Chesapeake Energy - soon to be the biggest U.S. gas producer after its merger with Southwestern Energy - cut the amount of gas it plans to pull out of the ground in 2024 due to the recent plunge in gas prices to a 3-1/2-year low. In addition to the Chesapeake news, traders noted gas prices gained strength from a recent drop in daily gas output and forecasts for higher demand next week than previously expected. Front-month gas futures for March delivery on the New York Mercantile Exchange rose 18 cents, or 11.4%, to $1.756 per million British thermal units (mmBtu) at 11:10 a.m. EST (1510 GMT). On Tuesday, the contract closed at its lowest since June 2020. In the spot market, meanwhile, next-day gas prices fell to $1.50 per mmBtu at the Henry Hub benchmark in Louisiana and $1.40 in Chicago , the lowest for both since October 2020. Power prices for Wednesday at Ercot North in Texas, which includes Dallas, fell to $10 per megawatt hour, their lowest since May 2017 when prices dropped to a record low of $8.32. SUPPLY AND DEMAND Financial company LSEG said gas output in the U.S. Lower 48 states rose to an average of 105.6 billion cubic feet per day (bcfd) so far in February from 102.1 bcfd in January, still shy of the monthly record of 106.3 bcfd in December. On a daily basis, however, output over the past six days was on track to drop by 2.2 bcfd to a preliminary three-week low of 103.8 bcfd on Wednesday. Meteorologists projected weather across the Lower 48 states would remain mostly warmer than normal through March 7. With warmer weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would fall from 130.0 bcfd this week to 119.3 bcfd next week. The forecast for this week was lower than LSEG's outlook on Tuesday, while its forecast for next week was higher. Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants slid to an average of 13.6 bcfd so far in February, down from 13.9 bcfd in January and a monthly record of 14.7 bcfd in December. Analysts do not expect U.S. LNG feedgas to return to record levels until Freeport LNG is back at full power, which could occur in late February. The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's war in Ukraine. Global gas was trading around $8 per mmBtu, which was near an eight-month low at the Dutch Title Transfer Facility (TTF) benchmark in Europe and was a 33-month low for the Japan Korea Marker (JKM) benchmark in Asia. Week ended Week ended Year ago Five-year Feb 16 Feb 9 Feb 16 average Forecast Actual Feb 16 U.S. weekly natgas storage change (bcf): -82 -49 -75 -168 U.S. total natgas in storage (bcf): 2,453 2,535 2,205 2,019 U.S. total storage versus 5-year average 21.5% 15.9% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2023 (2018-2022) Henry Hub 1.73 1.58 2.44 2.66 3.60 Title Transfer Facility (TTF) 7.50 7.50 16.52 13.04 14.39 Japan Korea Marker (JKM) 8.37 8.57 16.87 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 276 289 315 364 354 U.S. GFS CDDs 5 4 21 9 7 U.S. GFS TDDs 281 293 336 373 361 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 105.9 105.0 105.1 101.3 92.4 U.S. Imports from Canada 8.8 8.9 9.0 8.7 9.1 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2 Total U.S. Supply 114.7 113.9 114.0 110.0 101.7 U.S. Demand (bcfd) U.S. Exports to Canada 3.5 3.4 3.4 2.6 2.7 U.S. Exports to Mexico 6.5 6.3 6.4 5.8 5.2 U.S. LNG Exports 13.9 13.4 13.1 12.8 8.4 U.S. Commercial 13.7 14.8 12.5 14.1 16.3 U.S. Residential 22.1 23.9 19.4 22.6 27.6 U.S. Power Plant 32.3 35.1 32.5 30.3 29.3 U.S. Industrial 24.5 24.9 24.0 24.1 25.4 U.S. Plant Fuel 5.2 5.2 5.2 5.2 5.3 U.S. Pipe Distribution 2.7 2.8 2.6 2.7 2.7 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 100.7 106.8 96.3 99.1 106.7 Total U.S. Demand 124.6 130.0 119.3 120.3 123.0 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 79 83 107 81 Jan-Jul 83 81 77 102 79 Oct-Sep 82 81 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Feb 23 Feb 16 Feb 9 Feb 2 Jan 26 Wind 12 11 14 9 7 Solar 4 4 3 3 2 Hydro 7 7 7 7 6 Other 1 1 1 2 2 Petroleum 0 0 0 0 0 Natural Gas 41 41 38 40 43 Coal 15 16 16 18 22 Nuclear 20 21 21 20 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 1.50 1.55 Transco Z6 New York 1.56 1.59 PG&E Citygate 2.89 2.83 Eastern Gas (old Dominion South) 1.37 1.41 Chicago Citygate 1.40 1.48 Algonquin Citygate 2.66 2.99 SoCal Citygate 2.60 1.92 Waha Hub 0.39 0.73 AECO 1.15 1.20 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 43.50 33.00 PJM West 24.00 23.50 Ercot North 10.00 20.75 Mid C 68.25 65.00 Palo Verde 26.25 20.25 SP-15 25.00 19.50 (Reporting by Scott DiSavino; editing by Jonathan Oatis)