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NEW YORK: US natural gas futures slid about 2% on Thursday on a slow increase in output and a drop in oil futures on fears of an economic slowdown.

That US futures decline, came despite a jump in spot power and gas prices in many parts of the country as consumers in California, Texas, Louisiana, Pennsylvania and elsewhere crank up air conditioners to escape an early spring heat wave.

The decline also came ahead of a US report expected to show last week’s storage build was near-normal for this time of year.

Analysts forecast US utilities added 87 billion cubic feet (bcf) of gas to storage during the week ended May 13. That compares with an increase of 71 bcf in the same week last year and a five-year (2017-2021) average increase of 87 bcf.

If correct, last week’s increase would boost stockpiles to 1.730 trillion cubic feet (tcf), or 15.3% below the five-year average of 2.042 tcf for this time of the year.

US front-month gas futures for June delivery fell 14.5 cents, or 1.7%, to $8.223 per million British thermal units (mmBtu) by 9:30 a.m. EDT (1330 GMT).

US gas futures were still up about 120% since the start of the year as higher global prices kept demand for US liquefied natural gas (LNG) exports strong since Russia’s Feb. 24 invasion of Ukraine. Gas was trading around $28 per mmBtu in Europe and $21 in Asia. The US contract rose to a 13-year high near $9 on May 6.

US futures lag far behind global prices because the United States is the world’s top producer, with all the gas it needs for domestic use while capacity constraints inhibit exports of more LNG.

Data provider Refinitiv said average gas output in the US Lower 48 states climbed to 94.9 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in November 2021.

Refinitiv projected average US gas demand, including exports, would hold near 90.0 bcfd this week and next, higher than its outlook on Wednesday.

The amount of gas flowing to US LNG export plants held at 12.2 bcfd so far in May, the same as April. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas into LNG.

On a daily basis, however, LNG feedgas was on track to hit a six-week high of 13.1 bcfd on Thursday as some Gulf Coast plants exit maintenance outages.

Since the United States cannot produce much more LNG soon, it has worked with allies to divert exports from elsewhere to Europe to help European Union (EU) countries and others break their dependence on Russian gas.

Russian gas exports to Europe rose to around 7.8 bcfd on Wednesday from about 7.6 bcfd on Tuesday on the three mainlines into Germany: North Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route. That compares with an average of 11.9 bcfd in May 2021.

Gas stockpiles in Northwest Europe - Belgium, France, Germany and the Netherlands - were about 13% below the five-year (2017-2021) average for this time of year, down from 39% below the five-year norm in mid-March, according to Refinitiv. Storage was currently about 37% of full capacity.

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