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US natgas up 3% to 5-week high on record LNG feedgas, colder weather forecasts

March 3 (Reuters) - U.S. natural gas futures rose about 3% to a five-week high on Friday, with the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants set to hit a daily record high and on forecasts for colder weather and higher heating demand in two weeks than previously expected. The amount of gas flowing to LNG export plants was on track to hit a daily record high as Freeport LNG's facility in Texas keeps pulling in more of the fuel after exiting an eight-month outage in February. The plant shut after a fire in June 2022. Front-month gas futures for April delivery were up 6.9 cents, or 2.5%, to $2.834 per million British thermal units at 8:23 a.m. EST (1323 GMT), putting the contract on track for its highest close since Jan. 27. For the week, the front-month was up about 16%, which would be its biggest weekly gain since late July. It rose about 8% last week. Freeport LNG's export plant was on track to pull in about 1.4 billion cubic feet per day (bcfd) of gas on Friday, up from 1.2 bcfd on Thursday, according to data provider Refinitiv, a sign the company likely started the second of three liquefaction trains at the plant. Liquefaction trains turn gas into LNG. When operating at full power, Freeport LNG, the second-biggest U.S. LNG export plant, can turn about 2.1 bcfd of gas into LNG for export. Freeport LNG said on Feb. 21 that it could be consuming about 2.0 bcfd of feedgas "over the next several weeks." Some analysts have said that Freeport LNG will likely not return to full capacity until the end of April. Federal regulators have already approved the restart of two of Freeport LNG's three liquefaction trains (Trains 2 and 3). On Monday, Freeport LNG asked regulators for permission to restart the third (Train 1). The total amount of gas flowing to U.S. LNG export plants has risen to 13.4 bcfd so far in March from 12.8 bcfd in February. That compares with a monthly record of 12.9 bcfd in March 2022 before the Freeport LNG facility shut. The seven big U.S. LNG export plants, including Freeport LNG, can turn about 13.8 bcfd of gas into LNG. SUPPLY AND DEMAND Refinitiv said average gas output in the U.S. Lower 48 states has risen to 98.4 bcfd so far in March from 98.2 bcfd in February. That compares with a monthly record of 99.9 bcfd in November 2022. Analysts said production declined earlier this year due in part to recent drops in gas prices of 40% in January and 35% in December that caused several energy firms to reduce the number of rigs they were using to drill for gas. In addition, extreme cold in early February and late December cut gas output by freezing oil and gas wells in several producing basins. Meteorologists forecast the weather in the Lower 48 states would remain mostly colder-than-normal through March 18 after some warmer-than-normal days from March 3-6. Refinitiv forecast U.S. gas demand, including exports, would ease from 120.9 bcfd this week to 119.1 bcfd next week, mostly on expectations that power generators would burn less gas to produce electricity, before jumping to 127.4 bcfd in two weeks when the weather turns colder and heating demand picks up. Mostly mild weather in recent months has prompted utilities to leave more gas in storage than normal for this time of year. Gas stockpiles were about 19% above their five-year average (2018-2022) in the week ended Feb. 24 and were expected to end up about 22% above normal during the week ended March 3, according to federal data and analysts' estimates. Week ended Week ended Year ago Five-year Mar 3 Feb 24 Mar 3 average (Forecast) (Actual) Mar 3 U.S. weekly natgas storage change (bcf): -75 -81 -126 -101 U.S. total natgas in storage (bcf): 2,039 2,114 1,537 1,671 U.S. total storage versus 5-year average 22.0% 19.3% 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 2.82 2.77 4.98 6.54 3.60 Title Transfer Facility (TTF) 14.08 14.75 41.81 40.50 14.39 Japan Korea Marker (JKM) 14.59 14.58 36.96 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 357 344 347 330 313 U.S. GFS CDDs 10 12 10 11 10 U.S. GFS TDDs 367 356 357 341 323 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 98.1 98.6 98.6 93.8 89.4 U.S. Imports from Canada 7.8 8.4 8.6 9.6 8.6 U.S. LNG Imports 0.0 0.0 0.0 0.1 0.1 Total U.S. Supply 105.9 107.0 107.1 103.5 99.1 U.S. Demand (bcfd) U.S. Exports to Canada 2.7 3.1 3.3 3.4 3.0 U.S. Exports to Mexico 5.2 5.4 5.3 5.8 5.2 U.S. LNG Exports 13.0 12.8 13.8 12.5 7.4 U.S. Commercial 14.1 13.8 13.6 14.5 12.4 U.S. Residential 22.8 22.5 21.9 23.1 19.6 U.S. Power Plant 30.3 31.8 29.8 27.5 25.7 U.S. Industrial 24.1 23.8 24.0 24.4 23.6 U.S. Plant Fuel 4.8 4.9 4.9 4.8 4.9 U.S. Pipe Distribution 2.6 2.6 2.6 2.7 2.6 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 98.8 99.6 96.8 97.1 88.9 Total U.S. Demand 119.7 120.9 119.1 118.8 104.5 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Mar 3 Feb 24 Feb 17 Feb 10 Feb 3 Wind 13 15 15 15 10 Solar 3 3 3 3 2 Hydro 7 7 7 6 7 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 40 39 37 36 39 Coal 15 14 15 17 21 Nuclear 20 20 21 21 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.67 2.59 Transco Z6 New York 2.64 2.44 PG&E Citygate 12.03 12.21 Eastern Gas (old Dominion South) 2.44 2.30 Chicago Citygate 2.61 2.52 Algonquin Citygate 4.08 3.30 SoCal Citygate 11.32 11.50 Waha Hub 2.41 2.27 AECO 2.28 2.21 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 47.00 38.50 PJM West 33.00 34.00 Ercot North 25.75 23.00 Mid C 124.00 98.00 Palo Verde 80.50 78.50 SP-5 89.75 87.50 (Reporting by Scott DiSavino; Editing by Paul Simao)

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