UPDATE 1-U.S. natgas futures fall to fresh 14-year low on weak heating demand

(Adds latest prices)
    Dec 16 (Reuters) - U.S. natural gas futures set a 14-year low on Wednesday
on forecasts for continued unseasonably mild weather that should keep heating
demand extraordinarily light through late December.
    The front-month January contract is testing the $1.76 support level, which
was the 2001 low. If it falls below that, futures would drop to their lowest
point since March 1999.
    Front-month natural gas futures on the New York Mercantile Exchange 
closed down 3.2 cents, or down 1.8 percent, at $1.79 per million British thermal
units. Earlier Wednesday, they reached a contract low of $1.775.
    The contract finished down for a sixth day in a row, the longest losing
streak since January 2013.
    Over those six days, the front-month has collapsed about 12 percent, keeping
it in oversold territory for eight consecutive sessions with the Relative
Strength Index (RSI) at its lowest since January 2012.
    With the price rout, gas futures earlier Wednesday traded at a discount to
eastern coal futures on an mmBtu basis for the first time since June
    Power companies, however, have been burning record amounts of gas to
generate electricity all year. It makes sense when the gas premium over coal,
which carries higher environmental and transport costs, is less than $1 per
mmBtu, as it has been for more than three-quarters of 2015.
    Gas futures for the winter and all of 2016 have been depressed for most of
this year, with production at record levels, storage at record highs and
forecasts for a warmer-than-normal winter caused by the El Niño weather pattern.
    The premium of January 2017 futures over January 2016 and the
premium of April 2016 over March 2016 both climbed to all-time
    The calendar year 2016 strip set an all-time low of $2.20, which
would put it below the current year average of $2.65 and make it the lowest
annual price since 1998.
    With futures at 14-year lows, speculators were mixed on whether prices would
move higher or lower. Some of the most active American-style options on the
NYMEX were the $1.90 and $1.95 January 2016 calls and the $1.50 and $1.75
January 2016 puts. Open interest in the contracts was near all-time highs.
                                        Week ended  Prior   Year    Five-year
                                         Dec. 11    Week     Ago     Average
 U.S. natgas storage estimates             -40       -76     -62       -120
 (in bcf): Heating & Cooling Degree Days                                                
 Two-Week Average                        Current    Prior  30-Year            
                                           Day      Day     Norm    
 GFS HDDs                                  338       332     440              
 GFS CDDs                                   9         8       3               
 EC HDDs                                   295       301     411              
 EC CDDs                                    10        8       3               
 GFS Gas Consumption                                                          
 Two-Week Average                        Current    Prior  30-Year            
                                           Day       Day    Norm    
 Residential                               21.7     21.4    27.6              
 Commercial                                12.8     12.7    15.6              
 Power                                     24.2     23.9    19.1              
 Industrial                                21.6     21.5    24.2              
 Total                                     80.4     79.5    86.5              
 EC Gas Consumption                                                           
 Two-Week Average                        Current    Prior  30-Year            
                                           Day       Day    Norm    
 Residential                               20.3     20.6    27.5              
 Commercial                                12.0     12.2    15.5              
 Power                                     24.2     24.1    19.1              
 Industrial                                21.4     21.4    24.2              
 Total                                     77.0     78.3    86.2              
 Thomson Reuters Supply Estimates                                             
 (bcfd): Current    Prior   Prior   High since
                                           Day       Day    Year       2011
 U.S. Lower 48 production                  73.0     73.2    73.6       75.8
 Net U.S. imports from Canada              4.7       4.5     5.7       8.3
 U.S. LNG imports                          0.2       0.2     0.4       2.2
 U.S. exports to Mexico                    4.3       3.8     1.6       4.3 ICE U.S. Natural Gas Next-Day Prices                                         
 ($ per mmBtu):                                                     
 Hub                                     Current    Prior                     
                                           Day       Day            
 Algonquin E-ALGCIT-IDX                  1.93     1.71                      
 Dominion South E-DOMSP-IDX              1.05     1.07                      
 New York E-TSCO6NY-IDX                  1.50     1.71                      
 Henry Hub GT-HH-IDX                     1.68     1.65                      
 Chicago MC-CHICIT-IDX                   1.85     1.74                      
 SoCal Border W-SOBOR-IDX                2.33     2.21 ICE U.S. Power Next-Day Prices                                               
 ($ per megawatt-hour):                                             
 Hub                                     Current    Prior                     
                                           Day       Day            
 Ercot North SE-ERCONP-IDX              21.00                               
 Mid C W-MIDCP-IDX                      21.12     20.34                     
 New England E-NEPLMHP-IDX              24.25     23.29                     
 Palo Verde W-PVP-IDX                   23.91     22.66                     
 PJM West E-PJWHRTP-IX                  31.83     28.22                     
 SP-15 W-SP15-IDX                       31.60     29.10                     
 (Reporting by Scott DiSavino; Editing by Lisa Von Ahn and Lisa Shumaker)