July 10 (Reuters) - U.S. natural gas futures climbed about 3% to a one-week high on Monday on forecasts for hotter weather that should boost cooling demand more than previously expected through late July, especially in Texas. That price increase materialized even though drillers were pulling near record amounts of gas out of the ground. The Electric Reliability Council of Texas (ERCOT), the state's power grid operator, projected electricity use would reach record highs on Tuesday and Thursday as homes and businesses crank up their air conditioners to escape the latest heat wave. Extreme heat boosts the amount of gas generators burn to produce power for cooling, 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 were up 7.1 cents, or 2.8%, to $2.653 per million British thermal units (mmBtu) at 9:17 a.m. EDT (1317 GMT). On Friday, the contract closed at its lowest level since June 20. Despite last week's price decline, speculators boosted their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges to their highest levels since June 2022 for a third week in a row, according to the U.S. Commodity Futures Trading Commission's Commitments of traders report. A lack of big price moves in recent weeks has cut historic or actual 30-day close-to-close futures volatility to 59.2%, its lowest level since April 2022 for a second day in a row. 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 85.6%. 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 U.S. Lower 48 states has risen to 102.2 billion cubic feet per day (bcfd) so far in July, up from 100.9 bcfd in June. That is on track to top the monthly record high of 101.9 bcfd in May. Meteorologists forecast the weather in the Lower 48 states would turn hotter-than-normal through at least July 25. With higher temperatures coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 103.0 bcfd this week to 107.1 bcfd next week. Those forecasts were similar to Refinitiv's outlook on Friday. Gas flows to the seven big U.S. LNG export plants have risen to an average of 13.1 bcfd so far in July from 11.4 bcfd in June. That is still well below the monthly record of 14.0 bcfd in April due to ongoing maintenance at several facilities, including Cheniere Energy Inc's Sabine Pass in Louisiana and Corpus Christi 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 Jul 7 Jun 30 Jul 7 average Actual Actual Jul 7 U.S. weekly natgas storage change (bcf): 52 68 59 55 U.S. total natgas in storage (bcf): 2,929 2,877 2,361 2,566 U.S. total storage versus 5-year average 14.1% 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 2.64 2.61 7.19 6.54 2.89 Title Transfer Facility (TTF) 10.53 10.37 51.76 40.50 7.49 Japan Korea Marker (JKM) 12.08 12.10 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 1 2 2 3 4 U.S. GFS CDDs 254 240 239 212 203 U.S. GFS TDDs 255 242 241 215 207 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 102.1 102.2 102.1 97.1 90.5 U.S. Imports from Canada 7.9 7.9 7.8 8.7 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 110.0 110.0 109.9 105.8 98.8 U.S. Demand (bcfd) U.S. Exports to Canada 2.3 2.4 2.4 2.0 2.4 U.S. Exports to Mexico 6.5 6.6 6.6 6.0 5.5 U.S. LNG Exports 13.0 12.9 13.4 11.1 6.1 U.S. Commercial 4.3 4.4 4.3 4.3 4.5 U.S. Residential 3.4 3.6 3.5 3.5 3.6 U.S. Power Plant 45.0 44.5 48.0 43.4 41.7 U.S. Industrial 21.3 21.3 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 2.2 2.2 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 81.3 81.1 84.7 79.8 78.2 Total U.S. Demand 103.1 103.0 107.1 98.9 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 14 Jul 7 Jun 30 Jun 123 Jun 16 Wind 6 6 10 9 8 Solar 4 4 4 4 5 Hydro 5 6 6 6 6 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 45 45 43 42 43 Coal 19 19 18 17 16 Nuclear 19 18 17 19 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.49 2.50 Transco Z6 New York 1.54 1.61 PG&E Citygate 3.08 3.85 Eastern Gas (old Dominion South) 1.35 1.42 Chicago Citygate 2.02 2.15 Algonquin Citygate 3.05 4.30 SoCal Citygate 2.55 3.19 Waha Hub 1.98 2.14 AECO 1.76 1.83 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 45.50 75.50 PJM West 38.75 45.00 Ercot North 40.75 27.50 Mid C 52.17 63.75 Palo Verde 23.75 30.25 SP-15 25.00 29.75 (Reporting by Scott DiSavino; editing by Paul Simao)
