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Oil Report

UPDATE 2-U.S. natgas up 2% on big storage draw, near record LNG exports

 (Adds latest prices)
    March 10 (Reuters) - U.S. natural gas futures gained around 2% on Thursday as near-record liquefied
natural gas (LNG) exports caused utilities to pull more of the fuel from storage last week than expected and
on forecasts for more heating demand over the next two weeks.
    U.S. LNG exports have been strong in recent months because global oil and gas prices have
traded at or near record highs - especially since Russia's invasion of Ukraine on Feb. 24 stoked new energy
supply concerns. Russia is the world's second-biggest producer of gas behind the United States.
    After soaring to an all-time high over $106 per million British thermal units (mmBtu) on Monday, European
gas futures collapsed 30% on Wednesday and were down about 10% on Thursday as gas supplies
stabilized with continued high flows from Russia and massive LNG imports from around the world. That supply
stabilization prompted traders to take profits.
    Before the invasion, the United States worked with other countries to ensure gas supplies, mostly from
LNG, would keep flowing to Europe. Russia usually provides around 30% to 40% of Europe's gas, which totaled
about 16.3 billion cubic feet per day (bcfd) in 2021.
    The U.S. Energy Information Administration (EIA) said utilities pulled 124 billion cubic feet (bcf) of gas
from storage during the week ended March 4.
    That was higher than the 117-bcf withdrawal analysts forecast in a Reuters poll and compares with a
decline of 59 bcf in the same week last year and a five-year (2017-2021) average decline of 89 bcf.

    U.S. front-month gas futures rose 10.5 cents, or 2.3%, to settle at $4.631 per mmBtu.
    U.S. gas futures remain shielded from record European prices because the United States has all the fuel it
needs for domestic use and the country's ability to export more LNG is limited by capacity constraints.
    The United States is already producing LNG near full capacity, so no matter how high global gas prices
rise, it would not be able to produce much more of the supercooled fuel any time soon.
    Since U.S. LNG exports were already near maximum capacity, some analysts said soaring global energy prices
would actually cause American gas prices to decline as U.S. drillers seek more oil supplies. That would boost
the amount of associated gas that comes out of the ground with that oil.
    Data provider Refinitiv said average gas output in the U.S. Lower 48 states was on track to rise to 93.4
bcfd in March from 92.5 bcfd in February as more oil and gas wells return to service after freezing earlier in
the year. That compares with a monthly record of 96.2 bcfd in December.
    On a daily basis, gas output was on track to drop to 92.3 bcfd on Thursday as cold weather in some
producing basins reduces output.
    Refinitiv projected average U.S. gas demand, including exports, would hold around 112.0 bcfd this week and
next. Those forecast were higher than Refinitiv's outlook on Wednesday.
    The amount of gas flowing to U.S. LNG export plants rose to 12.58 bcfd so far in March from 12.43 bcfd in
February and a record 12.44 bcfd in January. The United States has the capacity to turn about 12.5 bcfd of gas
into LNG. The rest of the fuel flowing to the facilities is used to operate the plants.
    
                                              Week ended     Week ended     Year ago   Five-year        
                                                 Mar 4         Feb 25        Mar 4      average    
                                               (Actual)       (Actual)                   Mar 4     
 U.S. weekly natgas storage change (bcf):        -124           -139          -59         -89           
 U.S. total natgas in storage (bcf):             1,519          1,643        1,800       1,809          
 U.S. total storage versus 5-year average       -16.0%         -13.4% Global Gas Benchmark Futures ($ per mmBtu)   Current Day     Prior Day    This Month  Prior Year   Five Year
                                                                           Last Year    Average      Average
                                                                                          2021     (2017-2021)
 Henry Hub                                       4.57           4.53          2.62        3.73        2.89
 Title Transfer Facility (TTF)                   45.16          48.04         6.11       16.04        7.49
 Japan Korea Marker (JKM)                        38.97          42.62         6.39       18.00        8.95 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            298          265         292          282
 U.S. GFS CDDs                                    12             11            12          14          13
 U.S. GFS TDDs                                    287            309          277         306          295 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                    93.1           93.5          93.7        91.0        84.7
 U.S. Imports from Canada                         8.9            8.3          8.5         8.5          8.5
 U.S. LNG Imports                                 0.1            0.0          0.0         0.1          0.1
 Total U.S. Supply                               102.0          101.8        102.2        99.6        93.3 U.S. Demand (bcfd)                                                                                     
 U.S. Exports to Canada                           3.3            3.4          3.4         3.3          2.8
 U.S. Exports to Mexico                           5.8            5.7          5.6         5.7          4.9
 U.S. LNG Exports                                12.4           12.7          12.4        10.6         5.4
 U.S. Commercial                                 15.2           13.3          13.8        11.4        12.3
 U.S. Residential                                24.7           20.9          21.8        17.6        19.5
 U.S. Power Plant                                28.5           25.0          23.7        23.1        25.0
 U.S. Industrial                                 24.7           24.0          24.2        23.3        23.2
 U.S. Plant Fuel                                  4.6            4.6          4.6         4.6          4.6
 U.S. Pipe Distribution                           2.7            2.4          2.4         2.3          2.7
 U.S. Vehicle Fuel                                0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                          100.5          90.3          90.6        82.4        87.4
 Total U.S. Demand                               122.1          112.1        112.0       102.0        100.5 U.S. weekly power generation percent by fuel - EIA                                                
                                              Week ended     Week ended    Week ended  Week ended  Week ended
                                                Mar 11          Mar 4        Feb 25      Feb 18      Feb 11
 Wind                                             14             10            12          13          12
 Solar                                             3              3            3           3            3
 Hydro                                             8              7            7           7            7
 Other                                             2              2            2           2            2
 Petroleum                                         1              1            1           1            1
 Natural Gas                                      32             34            33          31          33
 Coal                                             20             22            22          23          23
 Nuclear                                          21             21            20          20          20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                                     
 Hub                                          Current Day     Prior Day                                 
 Henry Hub NG-W-HH-SNL                         4.55           4.61                                    
 Transco Z6 New York NG-CG-NY-SNL              4.36           4.34                                    
 PG&E Citygate NG-CG-PGE-SNL                   5.31           5.40                                    
 Dominion South NG-PCN-APP-SNL                 4.08           4.11                                    
 Chicago Citygate NG-CG-CH-SNL                 4.50           4.53                                    
 Algonquin Citygate NG-CG-BS-SNL               4.63           5.23                                    
 SoCal Citygate NG-SCL-CGT-SNL                 4.82           4.56                                    
 Waha Hub NG-WAH-WTX-SNL                       4.32           4.39                                    
 AECO NG-ASH-ALB-SNL                           3.97           4.12 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                                   
 Hub                                          Current Day                                               
 New England EL-PK-NPMS-SNL                    46.75          59.75                                   
 PJM West EL-PK-PJMW-SNL                       40.50          47.50                                   
 Ercot North EL-PK-ERTN-SNL                    44.56          62.20                                   
 Mid C EL-PK-MIDC-SNL                          39.00          40.65                                   
 Palo Verde EL-PK-PLVD-SNL                     36.00          29.50                                   
 SP-15 EL-PK-SP15-SNL                          37.50          29.75                                   
 
 (Reporting by Scott DiSavino
Editing by Nick Zieminski, Will Dunham and Jonathan Oatis)
  
 
 
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