US natgas prices fall 3% to one

July 27 (Reuters) - U.S. natural gas futures fell about 3% to a one-week low on forecasts for less demand and less hot weather over the next two weeks than previously expected. In the spot market, however, power and gas prices in some markets rose to their highest in months as homes and businesses crank up their air conditioners to escape a lingering heat wave that is boosting power demand and stressing electric grids across the country. That gas futures price decline came ahead of a federal report expected to show last week's storage build was much smaller than usual for this time of year after hot weather boosted cooling demand last week too. Analysts forecast U.S. utilities added 19 billion cubic feet (bcf) of gas into storage during the week ended July 21. That compares with an increase of 18 bcf in the same week last year and a five-year (2018-2022) average increase of 31 bcf. If correct, last week's increase would boost stockpiles to 2.990 trillion cubic feet (tcf), or 13.2% above the five-year average of 2.642 tcf for the time of year. On its next to last day as the front-month, gas futures for August delivery on the New York Mercantile Exchange fell 9.1 cents, or 3.4%, to $2.574 per million British thermal units (mmBtu) at 9:18 a.m. EDT (1318 GMT), putting the contract on track for its lowest close since July 17. Futures for September, which will soon be the front-month, were down about 7 cents to $2.63 per mmBtu. The premium of futures for September over August were on track to hit a record high for a second day in a row on Thursday. That is a big change from where the spread usually trades. Over the past four years, September has traded at a premium to August on just 14 occasions - all of them in June and July of 2023. In the spot market, next-day power prices for Thursday soared to their highest since December 2022 at the Palo Verde hub in Arizona and their highest since February 2023 at the PJM Western Hub , which covers an area from northwestern Pennsylvania to Washington, D.C. Next-day gas for Thursday at the Southern California Border , meanwhile, nearly doubled to $12.55 per mmBtu, their highest since March 2023. SUPPLY AND DEMAND Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 101.5 billion cubic feet per day (bcfd) so far in July, up from 101.0 bcfd in June. That compares with a monthly record of 101.8 bcfd in May. Even though the weather will be less hot over the next two weeks than previously expected, meteorologists forecast the weather in the Lower 48 states will remain hotter than normal through at least Aug. 11. Refinitiv forecast U.S. gas demand, including exports, would rise from 104.7 bcfd this week to 105.7 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants rose to an average of 12.7 bcfd so far in July from 11.6 bcfd in June. That is still well below the monthly record of 14.0 bcfd in April due to ongoing maintenance at several facilities. On a daily basis, however, LNG feedgas fell to a preliminary two-week low of 12.2 bcfd due to recent reductions at Cheniere Energy's Sabine Pass in Louisiana and the shutdown of the Columbia pipeline to Berkshire Hathaway Energy's Cove Point in Maryland. The amount of gas flowing to Cove Point was on track to reach 0.6 bcfd on Thursday, the same as Wednesday, after dropping to 0.5 bcfd on Tuesday due to the Columbia pipe fire. That compares with feedgas of around 0.8 bcfd since November. Week ended Week ended Year ago Five-year Jul 21 Jul 14 Jul 21 average Forecast Actual Jul 21 U.S. weekly natgas storage change (bcf): 19 41 18 31 U.S. total natgas in storage (bcf): 2,990 2,971 2,414 2,642 U.S. total storage versus 5-year average 13.2% 13.8% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 2.63 2.67 7.19 6.54 2.89 Title Transfer Facility (TTF) 9.39 9.58 51.76 40.50 7.49 Japan Korea Marker (JKM) 11.10 11.46 39.36 34.11 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 3 3 1 2 3 U.S. GFS CDDs 239 243 245 211 201 U.S. GFS TDDs 242 246 246 213 204 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 101.2 101.2 101.2 98.0 90.5 U.S. Imports from Canada 7.4 7.6 7.6 9.1 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 108.6 108.8 108.8 107.1 98.8 U.S. Demand (bcfd) U.S. Exports to Canada 1.7 1.6 1.6 2.5 2.4 U.S. Exports to Mexico 6.6 6.1 6.7 5.7 5.5 U.S. LNG Exports 12.7 12.7 12.7 10.6 6.1 U.S. Commercial 4.3 4.4 4.4 4.4 4.5 U.S. Residential 3.5 3.5 3.6 3.5 3.6 U.S. Power Plant 48.0 47.7 48.0 43.7 41.7 U.S. Industrial 21.3 21.4 21.4 21.3 21.1 U.S. Plant Fuel 5.0 5.0 5.0 5.0 5.0 U.S. Pipe Distribution 2.2 2.2 2.3 2.3 2.2 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 84.6 84.3 84.7 80.3 78.2 Total U.S. Demand 105.6 104.7 105.7 99.1 92.2 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2022 2021 2020 % of Normal % of Normal % of Normal % of Normal % of Normal Forecast Forecast Actual Actual Actual Apr-Sep 83 83 107 81 103 Jan-Jul 77 77 102 79 98 Oct-Sep 75 75 103 81 95 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Jul 28 Jul 21 Jul 14 Jul 7 Jun 30 Wind 6 7 7 6 10 Solar 4 4 4 4 4 Hydro 6 6 6 6 6 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 45 46 45 45 43 Coal 20 19 19 19 18 Nuclear 17 17 17 18 17 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.60 2.66 Transco Z6 New York 2.09 1.99 PG&E Citygate 5.32 5.43 Eastern Gas (old Dominion South) 1.47 1.65 Chicago Citygate 2.46 2.39 Algonquin Citygate 6.30 4.60 SoCal Citygate 12.55 6.65 Waha Hub 2.32 2.30 AECO 1.75 1.73 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 98.75 58.00 PJM West 142.75 51.50 Ercot North 56.00 40.75 Mid C 89.00 104.20 Palo Verde 231.00 126.00 SP-15 76.00 76.75 (Reporting by Scott DiSavino; editing by Jonathan Oatis)

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