US natural gas futures hit one-week low on milder weather outlook, lower demand

By Noel John

Nov 18 (Reuters) - U.S. natural gas futures fell for a third straight session on Tuesday to their lowest in more than a week, pressured by forecasts for milder late-November weather that are expected to curb heating demand.

Front-month gas futures for December delivery NGc1 on the New York Mercantile Exchange fell 9.3 cents, or 2%, at $4.27 per million British thermal units (mmBtu) at 10:13 a.m. EST (1513 GMT).

"The idea that we lost a lot of that deep cold coming in towards the second-half of November has certainly taken a lot of the bid interest away from the market," said Robert DiDona, president of Energy Ventures Analysis.

LSEG estimated 213 heating degree days (HDDs) over the next two weeks, lower than the 281 estimated on Tuesday. HDDs, which measure the number of degrees a day's average temperature is below 65 degrees Fahrenheit (18 degrees Celsius), are used to estimate demand to heat homes and businesses.

"Prices might hover between $4.25 to $4.50 for the month. What traders are waiting for is to kind of get through the storage report this week and to look at the weather forecast."

The U.S. Energy Information Administration is scheduled to release its weekly natural gas stocks report at 10:30 a.m. EST (1530 GMT) on Thursday.

In the cash market, meanwhile, average prices at the Waha Hub NG-WAH-WTX-SNL in the Permian shale basin in West Texas remained in negative territory for an ninth day this month as pipeline constraints trapped gas in the nation's biggest oil-producing basin.

SUPPLY AND DEMAND

Financial company LSEG said average gas output in the Lower 48 states rose to 109.2 billion cubic feet per day (bcfd) so far in November, up from 107.3 bcfd in October and a record monthly high of 108.3 bcfd in August.

Record output so far this year has allowed energy companies to stockpile more gas than usual. There was about 4% more gas in storage than normal for this time of year. EIA/GAS NGAS/POLL

LSEG expects average gas demand across the Lower 48, including exports, to ease to 115.5 bcfd this week and 115.6 bcfd next week, down from 118.9 bcfd last week.

The average amount of gas flowing to the eight big LNG export plants operating in the U.S. rose to 18.0 bcfd so far in November, up from a record 16.7 bcfd in October.

"With production running at a near record pace, the prospect of a major surplus reduction by early next month has been challenged," Ritterbusch said in a note.

On a daily basis, LNG feedgas rose to a record 18.6 bcfd on November 15 as flows to Venture Global LNG's VG.N 3.2-bcfd Plaquemines export plant in Louisiana hit a record 4.1 bcfd.

LNG plants can pull in more gas than they can turn into LNG since they use some to fuel operations.

In other LNG news, Venture Global VG.N said on Monday it had asked the U.S. Federal Energy Regulatory Commission for permission to more than double the capacity of its Plaquemines liquefied natural gas export facility under development in Louisiana.

Meanwhile, Dutch and British gas contracts rose as cold weather across the continent boosted gas demand for heating and increased withdrawals from European Union storage inventories. NG/EU