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U.S. natural gas futures up nearly 4% on soaring European prices

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Dec 13 (Reuters) - U.S. natural gas futures rose almost 4% to a fresh one-week high on Monday on forecasts for colder weather and higher demand next week than previously expected and an 11% jump in European gas prices that should keep U.S. liquefied natural gas (LNG) exports near record highs. Gas prices in Europe soared to their highest since hitting a record in early October on rising demand expectations and renewed concerns that Russia will hold back gas exports to Europe over delays to the startup of Gazprom PAO's Nord Stream 2 gas pipe from Russia to Germany. U.S. Secretary of State Antony Blinken said on Sunday that gas is unlikely to flow through Nord Stream 2 if Russia renews its aggression against Ukraine. Front-month gas futures was up 14.8 cents, or 3.8%, to $4.073 per million British thermal units (mmBtu) at 8:14 a.m. EST (1314 GMT), putting the contract on track for its highest close since Dec. 3 for a second day in a row. Before the latest price increase, speculators had cut their net long positions on the New York Mercantile and Intercontinental Exchanges for a second week in a row last week to their lowest since June 2020 on expectations the United States will have more than enough gas for the winter heating season. In recent months, global gas prices hit record highs as utilities around the world scrambled for LNG cargoes from the United States and elsewhere to replenish low stockpiles in Europe and meet surging demand in Asia, where energy shortfalls have caused power blackouts in China. U.S. futures jumped to a 12-year high in early October but have since pulled back because the United States has plenty of gas in storage and ample production for winter. Overseas prices were currently trading about 10 times higher than U.S. futures. Analysts have said European inventories were about 20% below normal for this time of year, compared with just 3% below normal in the United States. Looking ahead, many analysts said milder-than-normal weather expected in the coming weeks will allow U.S. utilities to leave enough gas in storage to cause stockpiles to reach above-normal levels by mid-December. That would be the first time storage would be at above-normal levels since April. Data provider Refinitiv said output in the U.S. Lower 48 states has averaged 96.6 billion cubic feet per day (bcfd) so far in December, putting it on track to top the monthly record of 96.5 bcfd in November. Refinitiv projected average U.S. gas demand, including exports, would jump from 110.3 bcfd this week to 123.7 bcfd next week as the weather turns seasonally colder. The amount of gas flowing to U.S. LNG export plants has averaged 12.0 bcfd so far in December now that the sixth train at Cheniere Energy Inc's Sabine Pass plant in Louisiana is producing LNG. That compares to 11.4 bcfd in November and a monthly record of 11.5 bcfd in April. With gas prices around $38 per mmBtu in Europe and $35 in Asia, compared with about $4 in the United States, traders said buyers around the world would keep purchasing all the LNG the United States can produce. Week ended Week ended Year ago Five-year Dec 10 Dec 3 Dec 10 average (Forecast) (Actual) Dec 10 U.S. weekly natgas storage change (bcf): -72 -59 -118 -114 U.S. total natgas in storage (bcf): 3,433 3,505 3,743 3,481 U.S. total storage versus 5-year average -1.4% -2.5% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2020 (2016-2020) Henry Hub 3.97 3.93 2.58 2.13 2.66 Title Transfer Facility (TTF) 37.67 34.92 5.82 3.24 5.19 Japan Korea Marker (JKM) 35.22 35.19 9.46 4.22 6.49 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 376 346 409 414 411 U.S. GFS CDDs 10 9 2 5 4 U.S. GFS TDDs 386 355 411 419 415 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 96.6 96.8 97.0 91.3 84.7 U.S. Imports from Canada 8.7 8.5 9.1 9.5 8.9 U.S. LNG Imports 0.0 0.0 0.0 0.4 0.3 Total U.S. Supply 105.3 105.3 106.1 101.2 93.9 U.S. Demand (bcfd) U.S. Exports to Canada 3.6 3.7 3.6 2.8 3.0 U.S. Exports to Mexico 5.7 5.5 5.5 5.6 4.6 U.S. LNG Exports 12.1 12.3 12.3 11.0 5.0 U.S. Commercial 13.8 12.7 15.9 16.7 15.0 U.S. Residential 21.9 20.6 26.8 28.2 25.4 U.S. Power Plant 28.4 25.1 27.3 30.1 25.8 U.S. Industrial 23.8 23.2 24.7 25.6 24.6 U.S. Plant Fuel 4.8 4.8 4.8 4.8 4.8 U.S. Pipe Distribution 2.5 2.4 2.7 2.4 2.4 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 95.3 88.9 102.3 107.9 98.1 Total U.S. Demand 116.6 110.3 123.7 127.3 110.7 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Dec 17 Dec 10 Dec 3 Nov 26 Nov 19 Wind 16 13 11 13 14 Solar 2 2 2 2 2 Hydro 7 7 6 6 6 Other 2 2 2 2 2 Petroleum 1 1 1 1 1 Natural Gas 33 36 37 34 35 Coal 17 19 19 20 19 Nuclear 22 21 22 22 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 3.66 3.67 Transco Z6 New York 2.95 3.21 PG&E Citygate 5.09 5.25 Dominion South 3.04 2.92 Chicago Citygate 3.50 3.43 Algonquin Citygate 3.83 3.67 SoCal Citygate 7.70 7.37 Waha Hub 3.27 3.28 AECO 3.08 3.02 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 39.25 56.50 PJM West 18.50 24.25 Ercot North 33.50 31.50 Mid C 59.50 38.00 Palo Verde 37.75 38.00 SP-15 49.25 55.25 (Reporting by Scott DiSavino Editing by Paul Simao)