July 6 (Reuters) - U.S. natural gas futures held near a one-week low on Thursday on near record output and forecasts for less demand over the next two weeks than previously expected. That lack of price movement came even though the amount of gas flowing to the nation's liquefied natural gas (LNG) export plants was rising and on forecasts the weather in the U.S. Lower 48 states would remain mostly hotter-than-normal through late July, especially in Texas. In Texas, the Electric Reliability Council of Texas (ERCOT), the state's power grid operator, projected another heat wave next week would boost electric use to fresh record highs on Monday-Thursday, July 10-13. Extreme heat boosts the amount of gas generators burn to produce power for air conditioning, especially in Texas, which 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 August delivery on the New York Mercantile Exchange fell 0.6 cents, or 0.2%, to $2.651 per million British thermal units at 9:41 a.m. EDT (1341 GMT), putting the contract on track for its lowest close June 28 for a second day in a row. That also put the front-month down for a third day in a row for the first time since late May. The lack of big price moves in recent weeks has cut historic or actual 30-day close-to-close futures volatility to just 60.0%, its lowest since April 2022. On a daily basis, historic volatility hit a record high of 177.7% in February 2022 and a record low of 7.3% in June 1991. So far this year, historic volatility has averaged 86.0%. That compares with an annual record high of 92.8% in 2022 and a five-year (2018-2022) average of 57.9%. SUPPLY AND DEMAND Data provider Refinitiv said average gas output in the Lower 48 states rose to 101.9 billion cubic feet per day (bcfd) so far in July, up from 100.9 bcfd in June, putting production on track to match the monthly record of 101.9 bcfd in May. Meteorologists forecast the weather in the Lower 48 states would remain near-normal until July 10 before turning hotter-than-normal through at least July 21. With hotter weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 103.0 bcfd this week to 103.3 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 13.2 bcfd so far in July, up from 11.5 bcfd in June. That, however, is still well below the monthly record of 14.0 bcfd in April due to maintenance at several facilities, including Cheniere Energy Inc's Sabine Pass in Louisiana. 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 30 Jun 23 Jun 30 average Forecast Actual Jun 30 U.S. weekly natgas storage change (bcf): 73 76 63 64 U.S. total natgas in storage (bcf): 2,878 2,805 2,302 2,511 U.S. total storage versus 5-year average 14.6% 14.6% 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 2.67 2.66 7.19 6.54 2.89 Title Transfer Facility (TTF) 10.46 11.25 51.76 40.50 7.49 Japan Korea Marker (JKM) 12.10 12.08 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 4 4 2 3 4 U.S. GFS CDDs 238 238 230 209 200 U.S. GFS TDDs 242 242 232 212 204 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 100.6 101.9 102.0 97.6 90.5 U.S. Imports from Canada 8.0 7.9 8.0 8.5 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 108.6 109.8 110.1 106.1 98.8 U.S. Demand (bcfd) U.S. Exports to Canada 2.0 2.3 2.4 2.2 2.4 U.S. Exports to Mexico 6.6 6.5 6.6 6.0 5.5 U.S. LNG Exports 11.8 13.0 13.2 11.1 6.1 U.S. Commercial 4.4 4.3 4.4 4.3 4.5 U.S. Residential 3.7 3.4 3.7 3.5 3.6 U.S. Power Plant 40.6 44.9 44.4 41.4 41.7 U.S. Industrial 21.3 21.2 21.3 21.1 21.1 U.S. Plant Fuel 5.0 5.0 5.0 5.0 5.0 U.S. Pipe Distribution 2.1 2.2 2.2 2.2 2.2 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 77.2 81.2 81.1 77.6 78.2 Total U.S. Demand 97.6 103.0 103.3 96.9 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 78 78 102 79 98 Oct-Sep 76 76 103 81 95 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Jul 7 Jun 30 Jun 23 Jun 16 Jun 9 Wind 6 10 9 8 5 Solar 4 4 4 5 5 Hydro 6 6 6 6 7 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 45 43 42 43 45 Coal 19 18 17 16 17 Nuclear 18 17 19 19 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.65 2.48 Transco Z6 New York 1.83 1.46 PG&E Citygate 3.94 3.85 Eastern Gas (old Dominion South) 1.41 1.40 Chicago Citygate 2.34 2.27 Algonquin Citygate 7.65 3.60 SoCal Citygate 3.55 3.40 Waha Hub 2.32 2.17 AECO 1.82 1.81 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 103.75 36.50 PJM West 41.50 32.75 Ercot North 30.00 65.25 Mid C 91.10 89.50 Palo Verde 30.50 49.75 SP-15 31.00 48.00 (Reporting by Scott DiSavino, Editing by Nick Zieminski)
