US natgas up 2% on forecast for more demand, record exports to Mexico

June 2 (Reuters) - U.S. natural gas futures rose about 2% on Friday on forecasts for more demand over the next two weeks than previously expected and record exports to Mexico. The price jump occurred despite near record U.S. output and continued low amounts of gas flowing to U.S. liquefied natural gas (LNG) export plants due to maintenance. Front-month gas futures for July delivery on the New York Mercantile Exchange (NYMEX) were up 4.5 cents, or 2.1%, to $2.203 per million British thermal units (mmBtu) at 9:01 a.m. EDT (1301 GMT). On Thursday, the contract closed at its lowest level since May 5. That put the contract up about 1% for the week after it lost about 16% last week. With growing interest in energy trading, open interest in NYMEX gas futures rose to 1.387 million contracts on Thursday, its highest number since September 2021. In the spot market, meanwhile, low demand due to mild weather cut next-day gas prices for Friday at the U.S. Henry Hub benchmark in Louisiana to $1.77 per mmBtu, their lowest price since October 2020. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has eased to 102.4 billion cubic feet per day (bcfd) so far in June, down from a monthly record of 102.5 bcfd in May. Meteorologists projected the weather in the Lower 48 states would remain mostly near through June 15 before turning warmer than normal from June 16-17. Refinitiv forecast U.S. gas demand, including exports, would rise from 91.0 bcfd this week to 93.9 bcfd next week and 95.0 bcfd in two weeks as the weather turns seasonally warmer, prompting power generators to start burning more gas to meet rising air conditioning use. The demand forecast for next week was higher than Refinitiv's forecast on Thursday. U.S. exports to Mexico have risen to 7.6 bcfd so far in June, up from 5.9 bcfd in May. That compares with a monthly record high of 6.7 bcfd in June 2021. Gas flows to the seven big U.S. LNG export plants rose to 13.1 bcfd have risen so far in June, up from 13.0 bcfd in May. That was still well below the monthly record of 14.0 bcfd in April due to maintenance at several facilities, including Cheniere Energy Inc's Sabine Pass in Louisiana. Record flows in April were higher than the 13.8 bcfd of gas the seven big export plants can turn into LNG since the facilities also use some of the fuel to power equipment used to produce LNG. GLOBAL GAS PRICE COLLAPSE Some analysts have questioned whether this year's gas price collapse in Europe and Asia could force U.S. exporters to cancel LNG cargoes this summer after mostly mild weather over the winter left massive amounts of gas in storage. In 2020, at least 175 LNG shipments were canceled due to weak demand. But for now, most analysts say energy security concerns following Russia's invasion of Ukraine in February 2022 should keep global gas prices high enough to sustain record U.S. LNG exports in 2023. Gas was trading at a 25-month low of around $7 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and near a 24-month low of $9 at the Japan Korea Marker (JKM) in Asia. That put both TTF and JKM down about 69% so far this year. U.S. gas futures, which are down about 52% so far this year, lag far behind global prices because the United States is the world's top producer with all the fuel it needs for domestic use, while capacity constraints prevent the country from exporting more LNG. Week ended Week ended Year ago Five-year Jun 2 May 26 Jun 2 average (Forecast) (Actual) Jun 2 U.S. weekly natgas storage change (bcf): 113 110 99 100 U.S. total natgas in storage (bcf): 2,559 2,446 1,988 2,197 U.S. total storage versus 5-year average 16.5% 16.6% Global Gas Benchmark Futures ($ per mmBtu) Current Prior Day This Month Prior Year Five Year Day Last Year Average Average 2022 (2018-2022) Henry Hub 2.17 2.16 7.60 6.54 3.60 Title Transfer Facility (TTF) 7.26 7.67 33.44 40.50 14.39 Japan Korea Marker (JKM) 9.27 9.29 29.72 34.11 14.31 Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days Two-Week Total Forecast Current Prior Day Prior Year 10-Year 30-Year Day Norm Norm U.S. GFS HDDs 14 13 14 24 23 U.S. GFS CDDs 135 140 132 145 135 U.S. GFS TDDs 149 153 146 169 158 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 101.7 103.1 102.9 97.3 89.8 U.S. Imports from Canada 6.4 6.8 6.7 8.2 7.9 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 108.2 109.9 109.7 105.5 97.8 U.S. Demand (bcfd) U.S. Exports to Canada 2.3 2.5 2.3 2.7 2.3 U.S. Exports to Mexico 5.7 6.7 6.3 6.0 5.5 U.S. LNG Exports 12.8 13.3 13.2 12.8 6.0 U.S. Commercial 4.9 4.5 4.5 4.6 4.7 U.S. Residential 4.5 3.9 3.8 4.0 4.3 U.S. Power Plant 32.2 31.7 35.5 31.0 34.8 U.S. Industrial 21.3 21.2 21.2 20.7 21.1 U.S. Plant Fuel 5.0 5.1 5.1 5.1 5.1 U.S. Pipe Distribution 1.9 1.8 1.9 1.8 1.8 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 70.0 68.4 72.2 67.3 71.9 Total U.S. Demand 90.8 91.0 93.9 88.8 85.7 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Jun 2 May 26 May 19 May 12 May 5 Wind 11 9 8 12 13 Solar 5 5 4 5 5 Hydro 8 9 9 9 8 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 39 40 42 40 39 Coal 14 15 15 14 13 Nuclear 21 20 19 19 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Prior Day Day Henry Hub 1.77 2.10 Transco Z6 New York 1.51 1.50 PG&E Citygate 2.81 3.09 Eastern Gas (old Dominion South) 1.37 1.46 Chicago Citygate 1.67 1.88 Algonquin Citygate 1.91 4.89 SoCal Citygate 1.83 2.13 Waha Hub 1.38 1.60 AECO 1.43 1.51 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Prior Day Day New England 54.50 54.50 PJM West 48.75 48.75 Ercot North 24.35 22.00 Mid C 32.00 54.50 Palo Verde 16.50 18.50 SP-15 18.25 20.75 (Reporting by Scott DiSavino; editing by Paul Simao)