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US natgas dips over 5% on forecasts for lower heating demand

March 17 (Reuters) - U.S. natural gas futures dipped more than 5% on Friday to their lowest since late-February on expectations for lower heating demand due to moderating weather, which set the contract on track for a second consecutive weekly decline. Front-month gas futures for April delivery fell 14.09 cents, or 5.6%, to $2.37 per million British thermal units (mmBtu) by 11:09 a.m. EDT. The weather outlook for later in March has shifted from colder-than-normal along the eastern seaboard to slightly warmer-than-normal, reducing the expectation of late season heating demand, said Gary Cunningham, director of Market Research at Tradition Energy, adding that Data provider Refinitiv estimated 275 heating degree days (HDDs) over the next two weeks, down from 381 HDDs estimated on Thursday. HDDs estimate demand to heat homes and businesses by measuring the number of degrees a day's average temperature is below 65 degrees Fahrenheit (18 degrees Celsius). "We are expecting gas demand for power generation this summer to set new records as switch over from dirtier fuels (coal) to natural gas continues to be the trend here in the U.S.," Cunningham said. For the week, the contract was down about 2% so far. Refinitiv forecasted that U.S. gas demand, including exports, would slide from 116.9 bcfd this week to 108.0 bcfd next week. Meanwhile, overall risk sentiment remained weak. Wall Street's main indexes fell on Friday as investors remained wary about a potential banking crisis. The U.S. Energy Information Administration (EIA) on Thursday said utilities pulled 58 billion cubic feet (bcf) of gas from storage during the week ended March 10 which was lower than 62-bcf withdrawal analysts forecast in a Reuters poll and compares with a decrease of 86 bcf in the same week last year and a five-year (2018-2022) average decline of 77 bcf. Meanwhile, gas flows to LNG export plants have been on track to hit record highs since Freeport LNG's export plant in Texas exited an eight-month outage in February. The plant was shut due to a fire in June 2022. Federal regulators approved the restart of two of Freeport LNG's three liquefaction trains (Trains 2 and 3) in February and the third train (Train 1) on March 8. Liquefaction trains turn gas into LNG. When operating at full power, Freeport LNG, the second-biggest U.S. LNG export plant, can turn about 2.1 bcfd of gas into LNG for export. The seven big U.S. LNG export plants, including Freeport LNG, can turn about 13.8 bcfd of gas into LNG. Week ended Week ended Year ago Five-year Mar 17 Mar 10 Mar 10 average (Forecast) (Actual) Mar 10 U.S. weekly natgas storage change (bcf): -80 -58 -86 -74 U.S. total natgas in storage (bcf): 1,892 1,972 1,451 1,594 U.S. total storage versus 5-year average 18.7% 23.7% 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 2.40 2.49 4.98 6.54 3.60 Title Transfer Facility (TTF) 14.18 13.55 41.81 40.50 14.39 Japan Korea Marker (JKM) 13.55 12.99 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 275 281 230 246 252 U.S. GFS CDDs 12 9 16 20 16 U.S. GFS TDDs 287 290 246 266 268 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 98.8 98.4 98.7 93.3 89.4 U.S. Imports from Canada 7.8 7.9 8.0 9.2 8.6 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 106.5 106.4 106.7 102.5 99.1 U.S. Demand (bcfd) U.S. Exports to Canada 3.1 2.7 2.7 3.4 3.0 U.S. Exports to Mexico 5.5 5.5 5.4 5.6 5.2 U.S. LNG Exports 13.2 13.6 13.4 12.7 7.4 U.S. Commercial 12.7 13.2 10.8 12.2 12.4 U.S. Residential 20.2 20.9 16.5 18.6 19.6 U.S. Power Plant 30.9 29.2 28.8 25.1 25.7 U.S. Industrial 23.6 24.2 23.1 23.2 23.6 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.5 2.5 2.3 2.6 2.6 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 94.8 95.1 86.5 86.7 88.9 Total U.S. Demand 116.6 116.9 108.0 108.4 104.5 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Mar 17 Mar 10 Mar 3 Feb 24 Feb 17 Wind 14 12 13 15 15 Solar 3 3 3 3 3 Hydro 7 7 7 7 7 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 38 41 40 39 37 Coal 17 16 15 14 15 Nuclear 19 20 20 20 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.45 2.45 Transco Z6 New York 2.20 2.27 PG&E Citygate 7.03 6.93 Eastern Gas (old Dominion South) 2.24 2.39 Chicago Citygate 2.53 2.15 Algonquin Citygate 2.38 2.48 SoCal Citygate 7.09 8.15 Waha Hub 1.46 1.44 AECO 2.92 3.02 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 32.75 36.50 PJM West 29.75 29.50 Ercot North 28.75 17.25 Mid C 88.50 101.25 Palo Verde 80.00 47.75 SP-5 64.75 65.00 (Reporting by Rahul Paswan in Bengaluru; Editing by Marguerita Choy)

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