US natgas prices fall 3% to 1-week low on lower demand forecasts

By Scott DiSavino

June 10 (Reuters) - U.S. natural gas futures fell about 3% on Tuesday to a one-week low, on lowered forecasts for demand over the next two weeks, partly because less gas will flow to liquefied natural gas (LNG) export plants because of ongoing spring maintenance at several facilities.

Gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 10.2 cents, or 2.8%, to settle at $3.533 per million British thermal units, their lowest close since May 30 for a second day in a row.

The premium of gas futures for November over October 2025 NGV25-X25 rose to a record high due to bigger increases in the November contract so far this year as traders bet on higher demand, lower supplies and/or lower amounts of gas in storage at the start of winter.

October is the last month of the April-October summer season when utilities inject gas into storage for use during the winter. November is the first month of the November-March winter season when utilities pull gas out of storage to heat homes and businesses.

So far this year, energy firms have pulled a monthly record high of 1.013 billion cubic feet (bcf) of gas out of storage during a brutally cold January and added a monthly record high of 497 bcf into storage in May when mild weather kept heating and cooling demand low, according to federal energy data. The prior all-time monthly injection high was 494 bcf in May 2015.

Analysts expect energy firms will keep setting storage records in coming weeks with a record-tying, seventh triple-digit injection forecast for the week ended June 6. The U.S. Energy Information Administration will release the storage report for the week ended June 6 on Thursday. EIA/GAS GAS/POLL

The last time energy firms added 100 bcf or more of gas into storage for seven weeks in a row was in June 2014, according to federal energy data going back to 2010.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states eased to 105.0 billion cubic feet per day so far in June from 105.2 bcfd in May and a monthly record high of 106.3 bcfd in March due primarily to normal spring maintenance.

Daily output was on track to drop by 3.2 bcfd to a preliminary four-month low of 102.6 bcfd on Tuesday. Analysts have noted that preliminary data is often revised later in the day.

LSEG forecast average gas demand in the Lower 48, including exports, would rise from 98.1 bcfd this week to 100.4 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday.

The average amount of gas flowing to the eight big U.S. LNG export plants fell to 13.8 bcfd so far in June from 15.0 bcfd in May and a monthly record high of 16.0 bcfd in April.

Traders said LNG feedgas reductions since April were primarily due to spring maintenance, including work at Cameron LNG's 2.0-bcfd plant in Louisiana and Cheniere Energy's LNG.N 4.5-bcfd Sabine Pass facility in Louisiana and 3.9-bcfd Corpus Christi plant in Texas, and short, unplanned unit outages at Freeport LNG's 2.1-bcfd plant in Texas on May 6, May 23, May 28 and June 3.

Energy traders have noted that LNG maintenance would likely continue through mid-June at Cameron and late-June at Sabine.

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

To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)

NYMEX Henry Hub options and futures combined 0#3CFTC023651

NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B

NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C