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UPDATE 2-U.S. natgas up near 2% on lower than expected storage build

(Adds latest prices, report from Climate Prediction Center) Oct 14 (Reuters) - U.S. natural gas futures gained almost 2% on Thursday on a smaller-than-expected storage build, lower output, rising liquefied natural gas (LNG) exports and higher global gas prices that will keep demand for those LNG exports strong. In addition, the U.S. Climate Prediction Center said La Nina conditions have developed, which could mean a cold and wet winter for the United States. The U.S. Energy Information Administration (EIA) said utilities added 81 billion cubic feet (bcf) of gas into storage during the week ended Oct. 8. That was much lower than the 94-bcf build analysts forecast in a Reuters poll and compares with an increase of 50 bcf in the same week last year and a five-year (2016-2020) average increase of 79 bcf. Even though last week's storage build was smaller than expected, it was still bigger than usual for a fifth week in a row. Traders said the lower-than-expected storage build was due to low wind power generation last week, which caused power generators to burn more gas. Last week's injection boosted stockpiles to 3.369 trillion cubic feet (tcf), or 4.9% below the five-year average of 3.543 tcf for this time of year. While utilities in Europe scramble to fill gas inventories before the winter heating season and governments around the world seek ways to control soaring prices, the situation in the United States is much calmer. Even with U.S. oil and gas prices near multi-year highs and expected to rise higher this winter, there is a growing belief in the market that the United States will have more than enough fuel for the winter. Analysts expect U.S. gas inventories will top 3.5 tcf by the start of the winter heating season in November, which they said would be a comfortable level even though it falls short of the 3.7 tcf five-year average. In Europe, analysts say stockpiles are about 15% below normal for this time of year. Front-month gas futures rose 9.7 cents, or 1.7%, to settle at $5.687 per million British thermal units (mmBtu). That was the contract's highest close since Oct. 5 when it settled at $6.312, its highest since December 2008. U.S. GAS DEMAND Data provider Refinitiv said gas output in the U.S. lower 48 states rose to an average of 92.1 billion cubic feet per day (bcfd) so far in October from 91.1 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019. Over the past few days, however, daily output fell to a four-week low of around 91.0 bcfd on lower production in the Haynesville shale. Refinitiv projected average U.S. gas demand, including exports, would rise from 84.9 bcfd this week to 85.5 bcfd next week as the weather turns seasonally cooler and more homes and businesses turn on their heaters. With gas prices near $33 per mmBtu in Europe and Asia, versus around $6 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States could produce. Refinitiv said the amount of gas flowing to U.S. LNG export plants had slipped from an average of 10.4 bcfd in September to 10.3 bcfd so far in October due to short-term work at some Gulf Coast plants and earlier maintenance at Berkshire Hathaway Energy's Cove Point LNG export plant in Maryland. With the return of Cove Point on Tuesday, however, LNG feedgas was on track to rise to a one-month high of 11.1 bcfd on Wednesday. Week ended Week ended Year ago Five-year Oct 8 Oct 1 Oct 8 average (Actual) (Actual) Oct 8 U.S. weekly natgas storage change (bcf): 81 118 50 79 U.S. total natgas in storage (bcf): 3,369 3,288 3,870 3,543 U.S. total storage versus 5-year average -4.9% -5.1% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2020 (2016-2020) Henry Hub 5.73 5.59 2.84 2.13 2.66 Title Transfer Facility (TTF) 33.40 32.02 4.89 3.24 5.19 Japan Korea Marker (JKM) 33.11 32.90 5.97 4.22 6.49 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 117 106 115 128 149 U.S. GFS CDDs 33 35 60 44 37 U.S. GFS TDDs 150 141 175 172 186 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 92.0 92.2 92.2 87.0 83.1 U.S. Imports from Canada 7.4 7.2 7.3 6.6 7.5 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 99.4 99.4 99.5 93.6 90.7 U.S. Demand (bcfd) U.S. Exports to Canada 2.1 2.4 2.4 2.2 2.0 U.S. Exports to Mexico 5.6 5.8 5.8 6.2 5.0 U.S. LNG Exports 9.9 10.6 11.0 7.2 3.7 U.S. Commercial 5.0 5.3 6.4 6.1 6.8 U.S. Residential 4.3 5.0 7.1 6.3 7.2 U.S. Power Plant 32.0 28.5 25.0 30.6 27.7 U.S. Industrial 20.6 20.7 21.4 22.2 21.6 U.S. Plant Fuel 4.5 4.6 4.6 4.6 4.5 U.S. Pipe Distribution 1.8 1.8 1.8 1.8 1.7 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 68.4 66.1 66.3 71.7 69.6 Total U.S. Demand 86.1 84.9 85.5 87.3 80.3 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub <NG-W-HH-SNL> 5.56 5.34 Transco Z6 New York <NG-CG-NY-SNL> 4.90 4.75 PG&E Citygate <NG-CG-PGE-SNL> 6.87 6.90 Dominion South <NG-PCN-APP-SNL> 4.76 4.56 Chicago Citygate <NG-CG-CH-SNL> 5.16 5.09 Algonquin Citygate <NG-CG-BS-SNL> 5.02 4.99 SoCal Citygate <NG-SCL-CGT-SNL> 6.00 6.23 Waha Hub <NG-WAH-WTX-SNL> 4.99 5.08 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England <EL-PK-NPMS-SNL> 91.50 61.75 PJM West <EL-PK-PJMW-SNL> 54.25 43.25 Ercot North <EL-PK-ERTN-SNL> 68.00 66.75 Mid C <EL-PK-MIDC-SNL> 73.34 68.13 Palo Verde <EL-PK-PLVD-SNL> 53.25 48.50 SP-15 <EL-PK-SP15-SNL> 51.25 50.25 (Reporting by Scott DiSavino; Editing by Diane Craft Editing by Mark Potter and Emelia Sithole-Matarise)

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