July 18 (Reuters) - U.S. natural gas futures climbed about 4% on Tuesday on forecasts for the weather to remain hotter-than-normal through early August, especially in Texas. That price increase came despite rising output, forecasts for less demand next week than previously expected and lower than usual amounts of gas flowing to U.S. liquefied natural gas (LNG) export plants due to ongoing maintenance outages. Power demand in Texas hit a record high on Monday and will likely break that on Tuesday as homes and businesses keep air conditioners cranked up to escape another brutal heatwave, according to the Electric Reliability Council of Texas (ERCOT), the state's power grid operator. 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 coming 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 rose 9.4 cents, or 3.7%, to $2.606 per million British thermal units (mmBtu) at 8:49 a.m. EDT (1249 GMT). On Monday, the contract closed at its lowest since June 20 for a third day in a row. SUPPLY AND DEMAND Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 101.6 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. Meteorologists forecast the weather in the Lower 48 states would remain hotter-than-normal through at least Aug. 2. Refinitiv forecast U.S. gas demand, including exports, would hold near 108.6 bcfd this week and next. The forecast for next week was lower than Refinitiv's outlook on Monday. 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, however, remained 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 U.S. is on track to become the world's biggest LNG supplier in 2023 - ahead of recent leaders Australia and Qatar - as much higher global prices continue to feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's war in Ukraine. Gas was trading around $9 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $11 at the Japan Korea Marker (JKM) in Asia. That puts global gas prices down about 65% so far this year after hitting record highs in 2022, due to mild winter temperatures and above-average storage inventories in the northern hemisphere. U.S. gas futures were down about 42% so far this year. In 2022, roughly 69%, or 7.2 bcfd, of U.S. LNG exports went to Europe as shippers diverted cargoes from Asia to get higher prices. In 2021, when prices in Asia were higher, just 35%, or about 3.3 bcfd, of U.S. LNG exports went to Europe. With the return of higher gas prices in Asia this year, analysts said they expect U.S. LNG exports to Asia will increase. But that has not happened yet. Just 19%, or 2.1 bcfd, of U.S. LNG exports went to Asia during the first half of 2023, while 70%, or 8.0 bcfd, went to Europe. Week ended Week ended Year ago Five-year Jul 14 Jul 7 Jul 14 average Forecast Actual Jul 14 U.S. weekly natgas storage change (bcf): 54 49 35 45 U.S. total natgas in storage (bcf): 2,984 2,930 2,396 2,611 U.S. total storage versus 5-year average 14.3% 14.2% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 2.58 2.51 7.19 6.54 2.89 Title Transfer Facility (TTF) 8.39 8.31 51.76 40.50 7.49 Japan Korea Marker (JKM) 10.56 10.69 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 2 3 3 U.S. GFS CDDs 256 254 248 213 205 U.S. GFS TDDs 259 257 250 216 208 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 101.4 101.2 101.3 97.1 90.5 U.S. Imports from Canada 10.2 11.6 15.1 8.9 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 111.6 112.7 116.4 106.0 98.8 U.S. Demand (bcfd) U.S. Exports to Canada 4.4 4.1 4.1 4.2 2.4 U.S. Exports to Mexico 6.8 6.6 6.7 6.2 5.5 U.S. LNG Exports 12.4 12.6 12.9 10.6 6.1 U.S. Commercial 4.4 4.3 4.4 4.4 4.5 U.S. Residential 3.6 3.5 3.5 3.6 3.6 U.S. Power Plant 44.4 48.6 48.2 46.3 41.7 U.S. Industrial 21.2 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 2.3 2.3 2.3 2.2 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 81.0 85.2 84.9 83.0 78.2 Total U.S. Demand 104.7 108.5 108.6 104.0 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 76 103 81 95 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Jul 21 Jul 14 Jul 7 Jun 30 Jun 23 Wind 6 7 6 10 9 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 46 45 45 43 42 Coal 19 19 19 18 17 Nuclear 17 17 18 17 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.46 2.50 Transco Z6 New York 1.70 1.58 PG&E Citygate 4.88 4.67 Eastern Gas (old Dominion South) 1.53 1.46 Chicago Citygate 2.28 2.23 Algonquin Citygate 2.02 1.77 SoCal Citygate 5.89 4.83 Waha Hub 2.16 2.23 AECO 1.69 1.51 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 42.50 42.25 PJM West 41.00 38.00 Ercot North 44.50 475.00 Mid C 115.25 102.63 Palo Verde 136.00 161.96 SP-15 96.50 145.50 (Reporting by Scott DiSavino, Editing by Nick Zieminski)
