US natgas prices ease 1% to 1-week low on big storage builds, forecasts for less demand

By Scott DiSavino

June 11 (Reuters) - U.S. natural gas futures eased about 1% to a one-week low on Wednesday on forecasts for less demand next week than previously expected that should enable energy firms to keep injecting much more gas than normal into storage in coming weeks.

That small price decline came despite signs Cameron LNG's plant in Louisiana would start pulling in more gas as it exits a maintenance reduction.

Gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 2.6 cents, or 0.7%, to settle at $3.507 per million British thermal units, their lowest close since May 30 for a third day in a row.

Prices edged up even as energy firms continue to add record amounts of gas into storage and as the cost of spot gas remains well below futures prices.

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 both heating and cooling demand low, according to federal energy data. The prior all-time monthly injection high was 494 bcf in May 2015.

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.

In a move that will likely provide coal and other fossil fuel power plants with more time to operate, the U.S. Environmental Protection Agency will announce on Wednesday the rollback of Biden administration rules meant to curb carbon dioxide, mercury and other air pollutant emissions, following through on a promise the agency made in March, according to sources.

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, down from 105.2 bcfd in May and a monthly record high of 106.3 bcfd in March due primarily to normal spring maintenance.

Meteorologists forecast weather across the Lower 48 states will remain mostly warmer than normal through June 26.

LSEG forecast average gas demand in the Lower 48, including exports, would rise from 98.6 bcfd this week to 100.0 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday, while the forecast for next week was lower.

The average amount of gas flowing to the eight big U.S. LNG export plants fell to 13.8 bcfd so far in June, down 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. Gas flows to Cameron were on track to edge up to a four-week high of 1.5 bcfd on Wednesday, up from an average of 1.4 bcfd over the past month, according to LSEG data.

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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