(Adds latest prices) June 20 (Reuters) - U.S. natural gas futures dropped about 5% on Tuesday on forecasts for less hot weather and demand over the next two weeks than previously expected as the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants declines due to maintenance outages. The price decline came despite a drop in gas output in recent weeks and even though the weather will still be hotter than normal in late June and early July, especially in Texas. The Texas power grid operator urged homes and businesses to conserve electricity on Tuesday evening to prevent power reserves from falling short as consumers crank up air conditioners to escape the first heat wave of the summer season. That will boost the amount of gas burned by power generators as Texas gets most of its power from gas. In 2022, about 49% of the state's power came from gas-fired plants, with most of the rest from wind (22%), coal (16%), nuclear (8%) and solar (4%), according to federal energy data. After rising for five days in a row, front-month gas futures for July delivery on the New York Mercantile Exchange fell 14.0 cents, or 5.3%, to settle at $2.492 per million British thermal units (mmBtu). On Friday, ahead of the Juneteenth holiday on Monday, the contract closed at its highest level since March 7. SUPPLY AND DEMAND Data provider Refinitiv said average gas output in the U.S. Lower 48 states fell to 101.6 billion cubic feet per day (bcfd) so far in June, down from a monthly record of 102.5 bcfd in May. Meteorologists forecast the weather would turn from mostly near-normal from June 20-23 to hotter than normal from June 24-July 5. The forecasts, however, were not as hot as previously expected. The U.S. National Hurricane Center (NHC) projected Tropical Storm Bret would remain a tropical storm as it moves west from the Atlantic Ocean over the next several days before dissipating in the Caribbean Sea around Saturday. The NHC projected another system in the Atlantic had an 80% chance of strengthening into a cyclone over the next five days as it moves west toward the Caribbean. With hot weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 94.0 bcfd this week to 98.9 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Friday. U.S. exports to Mexico rose to an average of 6.6 bcfd so far in June, up from 6.2 bcfd in May. That compares with a monthly record high of 6.7 bcfd in June 2021. Gas flows to the seven big U.S. LNG export plants fell to an average of 11.5 bcfd so far in June from 13.0 bcfd in May. That is well below the monthly record high of 14.0 bcfd in April due to maintenance at several facilities, including Cheniere Energy Inc's Sabine Pass in Louisiana and Freeport LNG in Texas. The record flows in April were higher than the 13.8 bcfd of gas the seven big plants can turn into LNG since the facilities also use some of the fuel to power equipment used to produce LNG. Week ended Week ended Year ago Five-year Jun 16 Jun 9 Jun 16 average (Forecast) (Actual) Jun 16 U.S. weekly natgas storage change (bcf): 99 84 76 86 U.S. total natgas in storage (bcf): 2,733 2,634 2,158 2,367 U.S. total storage versus 5-year average 15.5% 15.5% 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 2.66 2.63 7.60 6.54 3.60 Title Transfer Facility (TTF) 12.62 11.33 33.44 40.50 14.39 Japan Korea Marker (JKM) 11.20 13.69 29.72 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 7 7 7 7 10 U.S. GFS CDDs 203 191 193 181 176 U.S. GFS TDDs 210 197 200 188 186 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 101.7 100.4 100.7 97.8 89.8 U.S. Imports from Canada 6.5 6.8 6.6 8.9 7.9 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 108.1 107.2 107.3 106.7 97.8 U.S. Demand (bcfd) U.S. Exports to Canada 1.8 1.9 1.8 2.3 2.3 U.S. Exports to Mexico 6.4 6.6 6.5 6.0 5.5 U.S. LNG Exports 11.3 11.0 12.2 10.5 6.0 U.S. Commercial 4.5 4.4 4.4 4.4 4.7 U.S. Residential 3.8 3.7 3.7 3.6 4.3 U.S. Power Plant 36.9 38.0 41.8 37.9 34.8 U.S. Industrial 21.3 21.3 21.3 21.0 21.1 U.S. Plant Fuel 5.0 5.0 5.0 5.0 5.1 U.S. Pipe Distribution 2.0 2.0 2.1 2.0 1.8 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 73.5 74.6 78.3 74.0 71.9 Total U.S. Deman 93.0 94.0 98.9 92.8 85.7 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Jun 23 Jun 16 Jun 9 Jun 2 May 26 Wind 8 5 10 9 Solar 5 5 5 5 Hydro 6 7 8 9 Other 2 2 2 2 Petroleum 0 0 0 0 Natural Gas 43 45 40 40 Coal 16 17 15 15 Nuclear 20 20 20 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.13 2.18 Transco Z6 New York 1.38 1.38 PG&E Citygate 2.85 2.93 Eastern Gas (old Dominion South) 1.39 1.31 Chicago Citygate 2.24 2.04 Algonquin Citygate 1.46 1.69 SoCal Citygate 3.65 3.76 Waha Hub 1.86 1.92 AECO 1.77 1.76 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 24.50 28.00 PJM West 28.50 29.00 Ercot North 36.50 80.00 Mid C 37.00 28.25 Palo Verde 19.50 25.50 SP-15 25.00 26.25 (Reporting by Scott DiSavino; Editing by Alexander Smith and Leslie Adler)
