US natgas prices ease on forecasts for less demand this week

By Scott DiSavino

May 29 (Reuters) - U.S. natural gas futures eased about 1% on Thursday as forecasts for less demand than previously expected this week offset forecasts for more demand next week.

On its first day as the front-month, gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 3.5 cents, or 1.0%, from where the July contract closed on Wednesday to settle at $3.522 per million British thermal units.

Even though prices for the July contract were down, the front-month was still up about 10% from where the June contract expired when it was the front-month on Wednesday. That was also the highest close for the front month since May 13.

The U.S. Energy Information Administration said energy firms added 101 billion cubic feet of gas to storage during the week ended May 23.

In other news, U.S. energy company Williams Cos WMB.N said it is working with federal and state regulators to revive two previously canceled natural gas pipelines from Pennsylvania to New York - the Northeast Supply Enhancement and Constitution Pipeline.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states fell to 105.0 billion cubic feet per day so far in May, down from a monthly record of 105.8 bcfd in April.

On a daily basis, output was on track to drop to a preliminary three-week low of 104.3 bcfd on Thursday, down from 104.7 bcfd on Wednesday. The decline, however, was less than LSEG projected on Wednesday. Analysts have said preliminary data is often revised later in the day.

Energy traders said output reductions this month were primarily due to normal spring maintenance on gas pipelines, including U.S. energy firm Kinder Morgan's KMI.N 2.7-bcfd Permian Highway from the Permian Basin in West Texas to the Texas Gulf Coast. Kinder Morgan said it exchanged a turbine at the Big Lake compressor station from May 13-26.

Energy firms usually work on gas pipes when demand is low in the spring and autumn.

Meteorologists projected weather across the Lower 48 states would remain mostly warmer than normal through June 13.

LSEG forecast average gas demand in the Lower 48, including exports, will rise from 95.4 bcfd this week to 96.4 bcfd next week. The forecast for this week was lower than LSEG's outlook on Wednesday, while its forecast for next week was higher.

The average amount of gas flowing to the eight big LNG export plants operating in the U.S. fell to 15.1 bcfd so far in May, down from a monthly record of 16.0 bcfd in April.

The LNG feedgas decline this month was mostly due to maintenance at Cameron LNG's 2.0-bcfd plant in Louisiana, Cheniere Energy's LNG.N 3.9-bcfd Corpus Christi in Texas and Cheniere's 4.5-bcfd Sabine Pass in Louisiana, and a few brief reductions at Freeport LNG's 2.1-bcfd plant in Texas, including most recently on May 28.

Looking ahead, energy traders said they expect LNG feedgas to remain below April's record high in June with Cheniere planning about three weeks of maintenance on liquefaction trains at Sabine around June 2-23.

For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.

For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG terminal

For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html

For next-day SNL U.S. gas prices, see: 0#SNL-NG

For next-day SNL U.S. power prices, see: 0#SNL-PWR

For U.S. natgas price and storage polls, see: NGAS/POLL

For U.S. nuclear power outages, see: NUKE/

For U.S. Northwest hydro power report, see: NWRFC

For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

For the U.S. natural gas speed guide, see: USGAS

For the U.S. power speed guide, see: USPOWER

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