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Oil report

U.S. natgas futures drop over 6% on lower demand forecasts, rising output

    Oct 14 (Reuters) - U.S. natural gas futures dropped over 6% on Wednesday as output climbs with Gulf
Coast wells returning to service after Hurricane Delta and on forecasts for milder weather and lower
heating demand than previously expected over the next two weeks.
    That price drop came despite a continued increase in gas flows to liquefied natural gas (LNG)
export plants now that all facilities were ramping up following hurricane and maintenance shutdowns.
    Front-month gas futures fell 19 cents, or 6.7%, to $2.665 per million British thermal units
at 8:53 a.m. EDT (1253 GMT). That puts the contract down about 10% since hitting a 20-month intraday
high on Monday.
    Data provider Refinitiv said output in the Lower 48 U.S. states jumped to 85.8 billion cubic feet
per day (bcfd) on Tuesday from a 26-month low of 82.4 bcfd over the weekend as wells shut for Delta
returned to service.
    As LNG exports rise and the weather turns colder, Refinitiv projected average demand would jump
from 85.0 bcfd this week to 91.5 bcfd next week. That, however, is lower than Refinitiv's forecast on
Tuesday.
    The amount of gas flowing to LNG export plants has averaged 6.7 bcfd so far in October, up from 5.7
bcfd in September, despite several hurricane and maintenance outages this month.
    That would be the most in a month since April and puts exports on track to rise for a third month
in a row for the first time since February when feedgas hit a record 8.7 bcfd as rising global gas
prices have prompted buyers to reverse some earlier cargo cancellations.
    Prior to that, U.S. exports fell every month from March to July as coronavirus-related demand
destruction caused prices in Europe and Asia to collapse and buyers to cancel
around 175 cargoes.
                    
                                       Week ended     Week ended    Year ago   Five-year   
                                         Oct 9         Oct 2         Oct 9      average    
                                       (Forecast)      (Actual)                  Oct 9     
 U.S. natgas storage (bcf):                +63           +75          +102        +87 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                             158           167          190         125          151
 U.S. GFS CDDs                             44             40           37          45           32
 U.S. GFS TDDs                             202           207          227         160          183
                                                                                           
 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts                                     
                                       Prior Week    Current Week  Next Week   This Week    Five-Year
                                                                               Last Year   Average For
                                                                                              Month
 U.S. Supply (bcfd)
 U.S. Lower 48 Dry Production             86.8           84.0         83.7        94.9         80.1
 U.S. Imports from Canada                  6.7           6.2          6.3         7.3          7.6
 U.S. LNG Imports                          0.0           0.0          0.0         0.0          0.2
 Total U.S. Supply                        92.5           90.3         90.1       102.2         87.9
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.2           2.3          2.2         2.1          1.9
 U.S. Exports to Mexico                    5.9           6.1          6.0         5.6          4.5
 U.S. LNG Exports                          7.1           6.4          8.0         6.6          2.3
 U.S. Commercial                           6.0           5.7          7.7         7.2          6.7
 U.S. Residential                          6.2           5.5          9.2         8.6          7.0
 U.S. Power Plant                         31.2           31.0         29.2        28.9         26.8
 U.S. Industrial                          22.2           21.9         22.9        22.2         21.0
 U.S. Plant Fuel                           4.2           4.2          4.1         4.1          4.3
 U.S. Pipe Distribution                    1.9           1.9          2.0         1.9          1.8
 U.S. Vehicle Fuel                         0.1           0.1          0.1         0.1          0.1
 Total U.S. Consumption                   71.8           70.2         75.3        73.0         67.7
 Total U.S. Demand                        87.0           85.0         91.5        87.3         76.4 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                        
 Hub                                   Current Day    Prior Day                            
 Henry Hub NG-W-HH-SNL                                 2.31                              
 Transco Z6 New York NG-CG-NY-SNL                      1.24                              
 PG&E Citygate NG-CG-PGE-SNL                           4.21                              
 Dominion South NG-PCN-APP-SNL                         1.06                              
 Chicago Citygate NG-CG-CH-SNL                         1.75                              
 Algonquin Citygate NG-CG-BS-SNL                       1.33                              
 SoCal Citygate NG-SCL-CGT-SNL                         5.55                              
 Waha Hub NG-WAH-WTX-SNL                               0.20 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                      
 Hub                                   Current Day    Prior Day                            
 New England EL-PK-NPMS-SNL                           33.75                              
 PJM West EL-PK-PJMW-SNL                              22.58                              
 Ercot North EL-PK-ERTN-SNL                           27.50                              
 Mid C EL-PK-MIDC-SNL                                 28.25                              
 Palo Verde EL-PK-PLVD-SNL                            51.00                              
 SP-15 EL-PK-SP15-SNL                                 53.75                              
 
 (Reporting by Scott DiSavino in New York
Editing by Paul Simao and Matthew Lewis)
  
 
 
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