US natgas futures drop 12% to one-week low on milder forecast

March 6 (Reuters) - U.S. natural gas futures plunged by about 12% to a one-week low on Monday on forecasts for much less cold weather and heating demand than previously expected over the next two weeks. The drop came after the contract soared about 9% on Friday to a five-week high as gas flows to U.S. liquefied natural gas (LNG) export plants jumped to record highs, with Freeport LNG's export plant in Texas continuing to ramp up after exiting an eight-month outage in February. Front-month gas futures for April delivery fell 36.6 cents, or 12.2%, to $2.643 per million British thermal units at 8:52 a.m. EST (1352 GMT), putting the contract on track for its lowest close since Jan. 24. In what has already been an extremely volatile start to the year, Monday's price drop would be the front-month's biggest daily percentage decline since Jan. 30 when prices fell about 14%. Freeport LNG's export plant was on track to pull in about 1.7 billion cubic feet per day (bcfd) of gas on Monday, up from 1.4 bcfd on Friday, according to data provider Refinitiv. When operating at full power, Freeport LNG, the second-biggest U.S. LNG export plant, can turn about 2.1 bcfd of gas into LNG for export. The plant shut in a fire in June 2022. Freeport LNG said on Feb. 21 that it could consume about 2.0 bcfd of feedgas "over the next several weeks." Some analysts have said Freeport LNG will likely not return to full capacity until the end of April. Federal regulators have approved the restart of two of Freeport LNG's liquefaction trains (Trains 2 and 3). On Monday, Freeport LNG sought permission to restart the third (Train 1). Liquefaction trains turn gas into LNG. Total gas flowing to U.S. LNG export plants rose to 13.7 bcfd so far in March from 12.8 bcfd in February. That compares with a monthly record of 12.9 bcfd in March 2022, before the Freeport LNG facility shut. SUPPLY AND DEMAND Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.5 bcfd so far in March, up from 98.2 bcfd in February. That was still well below the monthly record of 99.9 bcfd in November 2022. Analysts said production declined earlier this year due in part to drops in gas prices of 40% in January and 35% in December that caused several energy firms to reduce the number of rigs drilling for gas. In addition, extreme cold in early February and late December cut gas output by freezing oil and gas wells in several producing basins. Meteorologists forecast the weather in the Lower 48 states would remain mostly colder-than-normal through March 21 after some near- to warmer-than-normal days from March 6-10. That coming cold, however was less frigid than Refinitiv projected on Friday. With colder weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 116.7 bcfd this week to 120.7 bcfd next week. Those forecasts, however, were much lower than Refinitiv's outlook on Friday. Milder winter weather so far this year has prompted utilities to leave more gas in storage than usual. Gas stockpiles were about 19% above their five-year average (2018-2022) during the week ended Feb. 24 and were expected to end about 22% above normal during the week ended March 3, according to federal data and analysts' estimates. Week ended Week ended Year ago Five-year Mar 3 Feb 24 Mar 3 average (Forecast) (Actual) Mar 3 U.S. weekly natgas storage change (bcf): -75 -81 -126 -101 U.S. total natgas in storage (bcf): 2,039 2,114 1,537 1,671 U.S. total storage versus 5-year average 22.0% 19.3% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2018-2022) Henry Hub 2.68 3.01 4.98 6.54 3.60 Title Transfer Facility (TTF) 13.39 14.15 41.81 40.50 14.39 Japan Korea Marker (JKM) 14.33 14.59 36.96 34.11 14.31 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 322 357 282 297 300 U.S. GFS CDDs 13 10 11 14 11 U.S. GFS TDDs 335 367 293 311 311 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 98.6 98.5 98.6 93.8 89.4 U.S. Imports from Canada 8.4 8.1 8.5 9.0 8.6 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 107.0 106.6 107.1 102.8 99.1 U.S. Demand (bcfd) U.S. Exports to Canada 3.1 3.3 3.3 3.2 3.0 U.S. Exports to Mexico 5.4 5.3 5.2 5.8 5.2 U.S. LNG Exports 12.8 13.9 13.4 12.8 7.4 U.S. Commercial 13.8 12.8 14.3 13.8 12.4 U.S. Residential 22.6 20.4 22.8 21.9 19.6 U.S. Power Plant 31.7 29.9 29.6 26.3 25.7 U.S. Industrial 23.8 23.5 24.4 24.7 23.6 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.7 2.5 2.6 2.5 2.6 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 99.6 94.2 98.8 94.2 88.9 Total U.S. Demand 120.9 116.7 120.7 116.0 104.5 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Mar 10 Mar 3 Feb 24 Feb 17 Feb 10 Wind 11 13 15 15 15 Solar 4 3 3 3 3 Hydro 7 7 7 7 6 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 40 40 39 37 36 Coal 15 15 14 15 17 Nuclear 21 20 20 21 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.66 2.67 Transco Z6 New York 2.48 2.64 PG&E Citygate 8.19 12.03 Eastern Gas (old Dominion South) 2.32 2.44 Chicago Citygate 2.55 2.61 Algonquin Citygate 4.14 4.08 SoCal Citygate 8.01 11.32 Waha Hub 2.06 2.41 AECO 2.43 2.28 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 65.50 47.00 PJM West 32.50 33.00 Ercot North 22.75 25.75 Mid C 85.50 124.00 Palo Verde 55.50 80.50 SP-5 62.00 89.75 (Reporting by Scott DiSavino; Editing by Alexander Smith)