UPDATE 1-US natgas futures rise 2% to one-month high again on colder forecasts

(Adds latest prices) March 1 (Reuters) - U.S. natural gas futures rose about 2% to a fresh one-month high on Wednesday on afternoon forecasts calling for colder weather and higher heating demand next week than previously expected. That price rise also came with a monthly drop in gas output in February and an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants to near record highs as Freeport LNG's export plant in Texas pulled in more gas after exiting an outage caused by a fire in June 2022. Front-month gas futures for April delivery rose 6.4 cents, or 2.3%, to settle at $2.811 per million British thermal units, their highest close since Jan. 27 for a third day in a row. That put the front-month up for a sixth day in a row for the first time since July 2021. During those six days, the contract has gained about 37%. It was, however, still down about 37% so far in 2023 after gaining about 20% in 2022. Price declines earlier in the year convinced many in the market to exit their investments in the U.S. Natural Gas Fund, an exchange-traded fund (ETF) designed to track the daily price movement of gas. UNG shares outstanding fell by a record 11.1 million shares on Tuesday, according to data provider Refinitiv, easily topping the prior daily record drop in shares outstanding of 8.7 million in October 2020. Freeport LNG, the second-biggest U.S. LNG export plant, was on track to pull in more than 0.8 billion cubic feet per day (bcfd) of gas from pipelines for a fourth day in a row on Wednesday, according to Refinitiv data. When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export. Freeport LNG said last week that it could be consuming about 2.0 bcfd of feedgas "over the next several weeks." Some analysts, however, have said 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). Liquefaction trains turn gas into LNG. On Monday, Freeport LNG asked regulators for permission to restart the third (Train 1). The total amount of gas flowing to all big U.S. LNG export plants jumped to 12.8 bcfd in February, up from 12.3 bcfd in January. That was just shy of the monthly record high of 12.9 bcfd set in March 2022 before Freeport LNG 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 dropped to 98.2 bcfd in February from 98.9 bcfd in January. That compares with a monthly record high of 99.9 bcfd in November 2022. Analysts blamed the production decline on 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 also 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 16 after several near- to warmer-than-normal days from March 1-7. Even with colder weather coming, Refinitiv forecast U.S. gas demand, including exports, would ease from 120.8 bcfd this week to 119.1 bcfd next week, mostly on expectations that power generators would burn less gas to produce electricity. The demand forecast for this week was higher than Refinitiv's outlook on Tuesday, while the forecast for next week was lower. Mostly mild weather so far this year, which caused prices to collapse in January and February, has prompted utilities to pull less gas from storage than normal. Gas stockpiles were about 15% above their five-year average (2018-2022) in the week ended Feb. 17 and were expected to end up about 20% above normal during the week ended Feb. 24, according to analysts' estimates. Week ended Week ended Year ago Five-year Feb 24 Feb 17 Feb 24 average (Forecast) (Actual) Feb 24 U.S. weekly natgas storage change (bcf): -75 -71 -137 -134 U.S. total natgas in storage (bcf): 2,120 2,195 1,663 1,772 U.S. total storage versus 5-year average 19.6% 15.2% 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 2.76 2.75 4.98 6.54 3.60 Title Transfer Facility (TTF) 14.67 14.56 41.81 40.50 14.39 Japan Korea Marker (JKM) 14.36 14.97 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 336 349 347 330 321 U.S. GFS CDDs 15 15 10 11 10 U.S. GFS TDDs 351 364 357 341 331 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 98.5 98.8 93.8 89.4 U.S. Imports from Canada 7.8 8.4 8.7 9.6 8.6 U.S. LNG Imports 0.0 0.0 0.0 0.1 0.1 Total U.S. Supply 105.9 106.9 107.5 103.5 99.1 U.S. Demand (bcfd) U.S. Exports to Canada 2.7 3.1 3.2 3.4 3.0 U.S. Exports to Mexico 5.2 5.4 5.2 5.8 5.2 U.S. LNG Exports 13.0 12.7 12.3 12.5 7.4 U.S. Commercial 14.1 13.9 13.9 14.5 12.4 U.S. Residential 22.8 22.7 22.7 23.1 19.6 U.S. Power Plant 30.3 31.7 30.2 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 98.4 97.1 88.9 Total U.S. Demand 119.7 120.8 119.1 118.8 104.5 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 2 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 2.50 2.55 Transco Z6 New York 2.45 2.52 PG&E Citygate 9.53 7.97 Eastern Gas (old Dominion South) 2.15 2.11 Chicago Citygate 2.43 2.40 Algonquin Citygate 3.12 7.24 SoCal Citygate 8.19 8.06 Waha Hub 1.80 1.90 AECO 2.15 2.11 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 52.50 94.00 PJM West 27.75 31.00 Ercot North 26.00 20.50 Mid C 116.75 87.83 Palo Verde 68.50 69.50 SP-5 75.50 80.25 (Reporting by Scott DiSavino; Editing by Alexander Smith and Nick Zieminski)