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U.S. natgas down 3% as Freeport LNG outage leaves more fuel for storage

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June 30 (Reuters) - U.S. natural gas futures fell about 3% on Thursday on expectations last week's storage build will be near normal despite hotter than usual weather, as the shutdown of Freeport's liquefied natural gas (LNG) export plant in Texas left more fuel available for utilities to stockpile. Prices fell despite a drop in daily output this week and forecasts for hotter than normal weather through at least early July, which should keep gas demand from power generators high as consumers crank up their air conditioners to escape the heat. Analysts forecast U.S. utilities added 74 billion cubic feet (bcf) of gas to storage during the week ended June 24, about even with 73 bcf in the same week last year and a five-year (2017-2021) average increase of 73 bcf. If correct, last week's increase would boost stockpiles to 2.243 trillion cubic feet (tcf), or 12.8% below the five-year average of 2.573 tcf for this time of the year. Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8, so the expected 90-day outage would leave around 180 bcf of gas available to the U.S. market. Front-month gas futures for August delivery fell 16.1 cents, or 2.5%, to $6.337 per million British thermal units (mmBtu) at 8:05 a.m. EDT (1205 GMT). That put the contract on track to drop about 22% in June, its biggest monthly decline since December 2018 when it fell 36%. Despite the decline, U.S. gas futures are still up about 71% so far this year as much higher prices in Europe and Asia feed strong demand for U.S. LNG exports, especially since Russia's Feb. 24 invasion of Ukraine stoked fears Moscow would cut gas supplies to Europe. Gas was trading around $45 per mmBtu in Europe and $37 in Asia. Russia's pipeline gas exports dropped to just 2.0 bcfd on Wednesday from 3.7 bcfd on Tuesday on the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route. That is down from around 6.5 bcfd in mid June and an average of 11.6 bcfd in June 2021. U.S. futures lag far behind global prices because the United States is the world's top producer, with all the gas it needs for domestic use, while capacity constraints limit LNG exports. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has slid to 95.1 bcfd so far in June from 95.2 bcfd in May and a monthly record of 96.1 bcfd in December 2021. Daily U.S. gas output was on track to drop 2.4 bcfd over the past four days to a preliminary nine-week low of 93.9 bcfd after hitting a six-month high of 96.2 bcfd on Sunday. Preliminary data is often revised later in the day. With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 94.1 bcfd this week to 95.3 bcfd next week. The forecast for next week was lower than Refinitiv's outlook on Wednesday. The average amount of gas flowing to U.S. LNG export plants has dropped to 11.1 bcfd so far in June due to the Freeport outage from 12.5 bcfd in May and a record 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.6 bcfd of gas into LNG. Week ended Week ended Year ago Five-year June 24 June 17 June 24 average (Forecast) (Actual) June 24 U.S. weekly natgas storage change (bcf): +74 +74 +73 +73 U.S. total natgas in storage (bcf): 2,243 2,169 2,547 2,573 U.S. total storage versus 5-year average -12.8% -13.2% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 6.44 6.50 3.27 3.73 2.89 Title Transfer Facility (TTF) 44.35 41.84 10.27 16.04 7.49 Japan Korea Marker (JKM) 37.16 37.00 11.58 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 6 5 2 5 5 U.S. GFS CDDs 236 230 202 197 193 U.S. GFS TDDs 242 235 204 202 198 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 95.2 95.4 95.8 91.0 84.6 U.S. Imports from Canada 7.7 7.8 7.8 8.0 7.7 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 102.9 103.2 103.6 99.0 92.4 U.S. Demand (bcfd) U.S. Exports to Canada 2.3 2.2 2.2 2.3 2.2 U.S. Exports to Mexico 6.0 5.9 6.1 6.5 5.1 U.S. LNG Exports 10.6 10.5 10.5 11.1 4.3 U.S. Commercial 4.4 4.4 4.3 4.3 4.7 U.S. Residential 3.7 3.5 3.6 3.5 4.3 U.S. Power Plant 37.9 39.7 40.7 39.5 32.8 U.S. Industrial 21.0 21.0 20.9 20.8 20.9 U.S. Plant Fuel 4.7 4.7 4.7 4.7 4.7 U.S. Pipe Distribution 2.0 2.0 2.0 2.0 1.8 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 73.8 75.4 76.5 74.9 69.3 Total U.S. Demand 92.7 94.1 95.3 94.8 80.9 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Jul 1 Jun 24 Jun 17 Jun 10 Jun 3 Wind 12 8 12 Solar 3 5 4 Hydro 7 7 7 Other 2 2 2 Petroleum 0 0 0 Natural Gas 38 41 36 Coal 20 20 19 Nuclear 17 19 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 6.69 6.66 Transco Z6 New York 6.50 6.14 PG&E Citygate 7.79 7.95 Dominion South 6.21 5.85 Chicago Citygate 6.51 6.49 Algonquin Citygate 7.52 6.25 SoCal Citygate 7.20 7.25 Waha Hub 6.20 6.25 AECO 4.87 4.91 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day New England 76.75 72.50 PJM West 113.75 100.25 Ercot North 83.00 76.25 Mid C 73.25 79.25 Palo Verde 64.50 65.25 SP-15 62.75 66.50 (Reporting by Scott DiSavino; Editing by Jan Harvey)