U.S. natgas up 1% on colder weather forecasts; Freeport LNG delay expected

Nov 15 (Reuters) - U.S. natural gas futures rose about 1% on Tuesday on forecasts for colder weather and more heating demand next week than previously expected, but expectations that Freeport LNG will delay the planned restart of its liquefied natural gas (LNG) export plant in Texas clouded the outlook. Once the 2.1-billion cubic feet per day (bcfd) Freeport facility returns to service, U.S. gas prices should rise due to an increase in demand from LNG export plants. On the flip side, the delay in Freeport's return means there will be less gas available for Europe to import, which helped cause prices there to spike around 9% on Tuesday. Europe needs the U.S. gas because it is not getting as much Russian fuel as usual after imposing sanctions on Moscow for Russia's invasion of Ukraine. Global gas markets have been extremely focused on news about Freeport this month - U.S. futures have gained or lost more than 5% on seven of the past 10 days - with some people creating fake news releases on Freeport letterhead and posting allegedly fake tweets about pipe cracks to sway the market up or down. Some traders have called on the U.S. Commodities Futures Trading Commission (CFTC) to investigate the alleged fake news. What is known for sure is that Freeport, as of Monday afternoon, had not submitted a request to resume service to the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), according to sources familiar with Freeport's filings. That lack of filing and the time it will likely take PHMSA and other federal regulators to review and approve Freeport's restart plan, has convinced many analysts, including experts at energy advisory firm Rapidan Energy Group, investment bank Goldman Sachs and energy consultancy Gelber & Associates, that the plant will not return to service until December at the earliest. Until late last week, Freeport had said repeatedly that the plant, which shut after an explosion on June 8, was on track to return to service in November. The company, however, did not mention a November restart, or any restart date, in comments made on Friday or Monday. A couple of vessels were waiting to pick up LNG from Freeport, according to Refinitiv data. Prism Diversity and Prism Courage were offshore from the plant, while LNG Rosenrot and Prism Agility were expected to arrive in late November. But one vessel, Prism Brilliance, which had been waiting outside the Freeport plant, seems to have given up on Freeport and was now sitting outside of Corpus Christi where Cheniere Energy Inc has an LNG export plant. Front-month gas futures were up 4.9 cents, or 0.8%, to $5.982 per million British thermal units (mmBtu) at 8:54 a.m. EST (1354 GMT). Gas futures are up about 60% so far this year as much higher global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine. Gas was trading at $38 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $27 at the Japan Korea Marker (JKM) in Asia. TOP PRODUCER U.S. gas futures lag global prices because the United States is the world's top producer with all the fuel it needs for domestic use, while capacity constraints and the Freeport outage have prevented the country from exporting more LNG. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has fallen to 99.1 bcfd so far in November, down from a record 99.4 bcfd in October. With the much colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 121.7 bcfd this week to 127.0 bcfd next week. The forecast for next week was higher than Refinitiv's outlook on Monday. Week ended Week ended Year ago Five-year Nov 11 Nov 4 Nov 11 average (Forecast) (Actual) Nov 11 U.S. weekly natgas storage change (bcf): +64 +79 +23 -5 U.S. total natgas in storage (bcf): 3,644 3,580 3,640 3,656 U.S. total storage versus 5-year average -0.3% -2.1% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 6.05 5.93 5.12 3.73 2.89 Title Transfer Facility (TTF) 38.28 34.74 27.71 16.04 7.49 Japan Korea Marker (JKM) 27.23 27.23 32.98 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 364 362 304 296 305 U.S. GFS CDDs 5 6 8 11 9 U.S. GFS TDDs 369 368 312 307 314 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 98.8 100.1 100.4 95.3 89.6 U.S. Imports from Canada 6.2 8.2 7.8 8.8 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 105.0 108.3 108.2 104.1 97.9 U.S. Demand (bcfd) U.S. Exports to Canada 2.3 2.1 2.1 3.3 2.9 U.S. Exports to Mexico 5.8 5.6 5.6 5.5 5.1 U.S. LNG Exports 11.5 12.2 12.6 11.3 6.4 U.S. Commercial 8.5 14.1 16.1 12.0 11.5 U.S. Residential 11.6 22.9 26.5 18.2 17.2 U.S. Power Plant 29.1 31.7 30.5 27.4 26.0 U.S. Industrial 22.6 25.2 25.6 23.4 24.0 U.S. Plant Fuel 4.9 4.9 5.0 4.9 4.9 U.S. Pipe Distribution 2.1 2.7 2.8 2.7 2.1 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 78.9 101.8 106.6 88.7 85.8 Total U.S. Demand 98.4 121.7 127.0 108.8 100.2 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Nov 18 Nov 11 Nov 4 Oct 28 Oct 21 Wind 11 15 12 15 11 Solar 3 3 3 3 3 Hydro 6 6 5 5 5 Other 2 3 2 2 3 Petroleum 0 0 0 0 0 Natural Gas 39 38 39 37 39 Coal 17 16 18 18 19 Nuclear 22 20 20 19 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 6.24 4.80 Transco Z6 New York 6.39 3.70 PG&E Citygate 8.76 8.46 Dominion South 5.43 3.31 Chicago Citygate 6.21 5.09 Algonquin Citygate 6.64 4.25 SoCal Citygate 8.87 8.30 Waha Hub 5.00 3.72 AECO 4.60 4.09 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 81.25 51.50 PJM West 103.00 52.50 Ercot North 71.50 45.50 Mid C 107.11 125.00 Palo Verde 85.50 90.00 SP-15 84.50 91.00 (Reporting by Scott DiSavino; Editing by Paul Simao)