U.S. natural gas futures dropped almost 7% on Wednesday to a three-month low on forecasts for mild winter weather, record output and ample amounts of gas in storage. Front-month gas futures for January delivery fell 30.9 cents, or 6.8%, to settle at $4.258 per million British thermal units (mmBtu), their lowest close since Aug. 26. That put the front-month down about 24% so far this week, its biggest three-day losing streak since December 2005. In addition to the collapse in the front-month, the 2022 March-April spread dropped to its lowest in 20 months as the market stops worrying about the possibility of supply shortages this winter. read more The gas industry calls the March-April spread the "widow maker" because rapid price moves resulting from changing weather forecasts have knocked some speculators out of business, including the Amaranth hedge fund, which lost over $6 billion on gas futures in 2006. In recent months, global gas prices hit record highs as utilities around the world scrambled for liquefied natural gas (LNG) cargoes to replenish extremely low stockpiles in Europe and meet insatiable demand in Asia, where energy shortfalls have caused power blackouts in China. Following those global gas prices, U.S. futures jumped to a 12-year high in early October, but have since pulled back because the United States has plenty of gas in storage and ample production for the winter. Overseas prices were trading about seven times higher than U.S. futures. Analysts have said European inventories were about 17% below normal for this time of year, compared with just 2% below normal in the United States. Data provider Refinitiv said output in the U.S. Lower 48 states jumped to a record average of 96.5 billion cubic feet per day (bcfd) in November, up from 94.2 bcfd in October, easily topping the prior all-time monthly high of 95.4 bcfd in November 2019. Refinitiv projected average U.S. gas demand, including exports, would rise from 112.5 bcfd this week to 116.8 bcfd next week as the weather turns seasonally colder and homes and businesses crank up their heaters. Those forecasts were higher than Refinitiv"s forecast on Tuesday. The amount of gas flowing to U.S. LNG export plants averaged 11.4 bcfd so far in November, up from 10.5 bcfd in October as the sixth train at Cheniere Energy Inc"s (LNG.A) Sabine Pass plant in Louisiana started producing LNG. That compares with a monthly record of 11.5 bcfd in April. read more With gas prices around $31 per mmBtu in Europe and $36 in Asia , compared with about $4 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States can produce. But no matter how high global gas prices rise, the United States only has the capacity to turn about 11.1 bcfd of gas into LNG. The rest of the gas flowing to the export plants is used to fuel equipment that produces the LNG. Global markets will have to wait until later this year to get more when Venture Global LNG"s Calcasieu Pass in Louisiana starts producing LNG in test mode. read more Week ended Nov 26 (Forecast) Week ended Nov 19 (Actual) Year ago Nov 26 Five-year average Nov 26 U.S. weekly natgas storage change (bcf): -57 -21 -4 -31 U.S. total natgas in storage (bcf): 3,566 3,623 3,939 3,650 U.S. total storage versus 5-year average -2.3% -1.6% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Last Year Prior Year Average 2020 Five Year Average (2016-2020) Henry Hub 4.43 4.57 2.58 2.13 2.66 Title Transfer Facility (TTF) 31.07 31.69 5.82 3.24 5.19 Japan Korea Marker (JKM) 35.95 36.25 9.46 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 Norm 30-Year Norm U.S. GFS HDDs 344 310 356 370 374 U.S. GFS CDDs 6 6 2 6 5 U.S. GFS TDDs 350 316 358 376 375 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Week Next Week This Week Last Year Five-Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 96.8 97.2 97.6 91.7 84.7 U.S. Imports from Canada 8.4 8.9 9.4 8.8 8.9 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.3 Total U.S. Supply 105.3 106.1 107.0 100.5 93.9 U.S. Demand (bcfd) U.S. Exports to Canada 3.1 3.4 3.8 2.5 3.0 U.S. Exports to Mexico 5.3 5.6 5.4 5.7 4.6 U.S. LNG Exports 11.7 11.9 11.6 10.9 5.0 U.S. Commercial 13.4 13.2 14.9 14.6 15.0 U.S. Residential 21.1 20.8 24.0 24.1 25.4 U.S. Power Plant 26.2 26.6 25.3 28.4 25.8 U.S. Industrial 23.9 23.6 24.2 25.1 24.6 U.S. Plant Fuel 4.8 4.8 4.8 4.8 4.8 U.S. Pipe Distribution 2.4 2.4 2.6 2.4 2.4 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 91.9 91.6 95.9 99.5 98.1 Total U.S. Demand 112.0 112.5 116.8 118.6 110.7 U.S. weekly power generation percent by fuel - EIA Week ended Dec 3 Week ended Nov 26 Week ended Nov 19 Week ended Nov 12 Week ended Nov 5 Wind 11 14 14 14 9 Solar 2 2 2 2 3 Hydro 6 6 6 6 6 Other 2 2 2 2 2 Petroleum 1 1 1 1 1 Natural Gas 36 34 35 35 40 Coal 20 20 19 19 19 Nuclear 22 22 21 21 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 4.52 4.90 Transco Z6 New York 4.30 5.50 PG&E Citygate 4.85 5.50 Dominion South 3.95 4.54 Chicago Citygate 4.10 4.66 Algonquin Citygate 7.60 7.92 SoCal Citygate 5.29 4.85 Waha Hub 3.95 4.40 AECO 2.95 3.81 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 88.75 82.75 PJM West 34.75 47.00 Ercot North 47.25 41.00 Mid C 25.00 28.29 Palo Verde 31.50 44.75 SP-15 49.00