U.S. natgas futures steady as market balances cold forecasts

Nov 11 (Reuters) - U.S. natural gas futures were little changed at the end of an extremely volatile week on Friday as the market balanced forecasts for the weather to remain colder than normal through late November but less cold next week than previously expected. Traders also noted the market remained hyper focused on unproven rumors that the Freeport liquefied natural gas (LNG) export plant in Texas may not return until December. Sources familiar with Freeport LNG's filings with federal safety regulators told Reuters late Thursday that Freeport LNG has not yet submitted a request to resume service to the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA). Analysts at Goldman Sachs, an investment bank, Gelber & Associates, an energy consulting firm, and others have said that lack of a request to resume service likely means the plant will not return until December. Freeport LNG, however, has said repeatedly that it still expects the 2.1 billion-cubic-feet-per-day (bcfd) export plant to return to at least partial service in November following an explosion that shut the plant on June 8. 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, is now waiting outside Corpus Christi in Texas where Cheniere Energy Inc has an LNG export plant, according to Refinitiv data. Front-month gas futures fell 1.8 cents, or 0.3%, to $6.221 per million British thermal units (mmBtu) at 8:07 a.m. EST (1307 GMT). That put the contract on track to decline by about 2% for the week after gaining about 15% and 13% during the prior two weeks. EXTREME VOLATILITY Rapid price changes over the past couple of weeks - futures gained or lost more than 5% on eight of the past 10 days - boosted the contract's 30-day implied volatility index to its highest level since hitting a record in October 2021 for a third day in a row. The market uses implied volatility to estimate likely price changes in the future. Gas futures were up about 67% 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 $31 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $28 at the Japan Korea Marker (JKM) in Asia. U.S. gas futures lag far behind global prices because the United States is the world's top producer with all the fuel it needs for domestic use, while capacity constraints and the Freeport outage have prevented the country from exporting more LNG. Data provider Refinitiv said that average gas output in the U.S. Lower 48 states has fallen to 98.6 bcfd so far in November, down from a record 99.4 bcfd in October. With the much colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 98.2 bcfd this week to 119.9 bcfd next week and 124.2 bcfd in two weeks. The forecast for next week was lower than Refinitiv's outlook on Thursday. The average amount of gas flowing to U.S. LNG export plants rose to 11.5 bcfd so far in November, up from 11.3 bcfd in October. That is still well below the monthly record of 12.9 bcfd in March due mostly to the ongoing outage at Freeport. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG. Week ended Week ended Year ago Five-year Nov 11 Nov 4 Nov 11 average (Forecast) (Actual) Nov 11 U.S. weekly natgas storage change (bcf): +64 +79 +23 -5 U.S. total natgas in storage (bcf): 3,644 3,580 3,640 3,656 U.S. total storage versus 5-year average -0.3% -2.1% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 6.21 6.24 5.12 3.73 2.89 Title Transfer Facility (TTF) 30.59 33.81 27.71 16.04 7.49 Japan Korea Marker (JKM) 27.55 27.73 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 355 351 236 264 286 U.S. GFS CDDs 7 8 11 15 11 U.S. GFS TDDs 362 359 247 279 297 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 99.1 98.8 99.2 95.7 89.6 U.S. Imports from Canada 7.3 6.2 7.0 8.6 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 106.4 105.0 106.2 104.3 97.9 U.S. Demand (bcfd) U.S. Exports to Canada 2.6 2.3 2.2 3.0 2.9 U.S. Exports to Mexico 5.4 5.8 5.7 5.5 5.1 U.S. LNG Exports 11.9 11.5 12.2 11.2 6.4 U.S. Commercial 7.9 8.4 13.8 11.1 11.5 U.S. Residential 10.4 11.5 22.2 16.7 17.2 U.S. Power Plant 29.6 29.0 30.9 26.3 26.0 U.S. Industrial 22.6 22.6 25.1 22.4 24.0 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.1 2.1 2.6 2.1 2.1 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 77.6 78.7 99.6 83.6 85.8 Total U.S. Demand 97.6 98.2 119.8 103.3 100.2 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Nov 11 Nov 4 Oct 28 Oct 21 Oct 14 Wind 14 12 15 11 11 Solar 3 3 3 3 4 Hydro 6 5 5 5 5 Other 3 2 2 3 3 Petroleum 0 0 0 0 0 Natural Gas 39 39 37 39 41 Coal 15 18 18 19 18 Nuclear 20 20 19 19 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 4.80 3.46 Transco Z6 New York 3.70 2.22 PG&E Citygate 8.46 8.17 Dominion South 3.31 1.91 Chicago Citygate 5.09 3.46 Algonquin Citygate 4.25 2.37 SoCal Citygate 8.30 8.42 Waha Hub 3.72 2.65 AECO 4.07 3.96 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 51.50 47.25 PJM West 52.50 51.00 Ercot North 45.50 38.50 Mid C 125.00 100.00 Palo Verde 90.00 64.00 SP-15 91.00 69.75 (Reporting by Scott DiSavino)