June 23 (Reuters) - U.S. natural gas futures fell about 3% on Friday on forecasts for less demand next week than previously expected due in part to a drop in the amount of gas flowing to liquefied natural gas (LNG) export plants and a drop in European gas prices. That price decline came despite lower U.S. output in recent weeks and forecasts for the weather to remain hot through early July, especially in Texas. The Electric Reliability Council of Texas (ERCOT), the state's power grid operator, again projected electric use would break records, this time Monday-Tuesday, June 26-27. ERCOT also projected power use would reach record highs this week but demand fell short of the record after storms and storm-related power outages reduced usage and consumers heeded the grid operator's June 20th call to conserve energy. Regardless of when demand sets a new all-time high, the heat should boost the amount of gas generators burn to produce power for air conditioning since Texas gets most of its electricity from gas-fired plants. 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. Front-month gas futures for July delivery on the New York Mercantile Exchange fell 6.9 cents, or 2.7%, to $2.539 per million British thermal units (mmBtu) at 9:33 a.m. EDT (1333 GMT). That put the contract down about 4% for the week after it gained about 17% last week. Around the world, gas prices at the Dutch Title Transfer Facility (TTF) benchmark in Europe plunged about 12% to a one-week low near $10 per mmBtu. SUPPLY AND DEMAND Data provider Refinitiv said average gas output in the U.S. Lower 48 states fell from a record 102.5 billion cubic feet per day (bcfd) in May to 101.5 bcfd so far in June due in part to ongoing pipeline maintenance in the Haynesville shale in Arkansas, Louisiana and Texas, and other basins. Meteorologists forecast the weather in the Lower 48 states would turn mostly hotter than normal from June 24-July 8. With hot weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 94.7 bcfd this week to 97.8 bcfd next week and 101.5 bcfd in two weeks. The forecast for next week was lower than Refinitiv's outlook on Thursday. U.S. exports to Mexico rose to an average of 6.6 bcfd so far in June from 6.2 bcfd in May. That compares with a monthly record high of 6.7 bcfd in June 2021. Gas flows to the seven big U.S. LNG export plants fell to an average of 11.4 bcfd so far in June from 13.0 bcfd in May. That is well below the monthly record high of 14.0 bcfd in April due to maintenance at several facilities, including Cheniere Energy Inc's Sabine Pass in Louisiana and Freeport LNG in Texas. The record flows in April exceeded the 13.8 bcfd of gas the seven big plants can turn into LNG since the facilities also use some of the fuel to power equipment used to produce LNG. Week ended Week ended Year ago Five-year Jun 23 Jun 16 Jun 23 average (Forecast) (Actual) Jun 23 U.S. weekly natgas storage change (bcf): 84 95 81 80 U.S. total natgas in storage (bcf): 2,813 2,729 2,239 2,447 U.S. total storage versus 5-year average 15.0% 15.3% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 2.63 2.61 7.60 6.54 2.89 Title Transfer Facility (TTF) 10.41 11.94 33.44 40.50 7.49 Japan Korea Marker (JKM) 12.07 12.48 29.72 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 4 7 7 7 U.S. GFS CDDs 215 211 193 181 182 U.S. GFS TDDs 218 215 200 188 187 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 101.7 100.7 101.1 97.8 89.8 U.S. Imports from Canada 6.5 6.8 7.1 8.9 7.9 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 108.1 107.5 108.2 106.7 97.8 U.S. Demand (bcfd) U.S. Exports to Canada 1.8 1.9 2.0 2.3 2.3 U.S. Exports to Mexico 6.4 6.6 6.6 6.0 5.5 U.S. LNG Exports 11.3 11.0 11.4 10.5 6.0 U.S. Commercial 4.5 4.4 4.4 4.4 4.7 U.S. Residential 3.8 3.7 3.6 3.6 4.3 U.S. Power Plant 36.9 38.6 41.3 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 75.2 77.9 74.0 71.9 Total U.S. Demand 93.0 94.7 97.8 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 9 8 5 10 9 Solar 4 5 5 5 5 Hydro 6 6 7 8 9 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 42 43 45 40 40 Coal 17 16 17 15 15 Nuclear 19 19 20 20 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.27 2.24 Transco Z6 New York 1.11 1.34 PG&E Citygate 3.10 3.03 Eastern Gas (old Dominion South) 1.14 1.28 Chicago Citygate 2.21 2.14 Algonquin Citygate 3.35 1.51 SoCal Citygate 5.02 4.80 Waha Hub 2.24 2.27 AECO 1.87 1.78 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 42.50 26.00 PJM West 33.50 29.0 Ercot North 35.50 48.50 Mid C 38.33 43.00 Palo Verde 13.50 18.50 SP-15 12.50 20.50 (Reporting by Scott DiSavino Editing by Nick Zieminski)
