Updates prices

By Scott DiSavino

June 26 (Reuters) -U.S. natural gas futures fell over 5% to a three-week low on Wednesday on signs producers were slowly boosting output to meet rising summer demand and as the amount of gas in storage remains well above normal levels.

Analysts forecast there was about 20% more gas in storage than normal at this time of year. EIA/GAS NGAS/POLL

The futures decline came despite forecasts for a brutal heat wave to keep baking much of the country through at least mid July, forcing power generators to keep burning lots of gas to keep air conditioners humming.

On their last day as the front-month, gas futures NGc1 for July delivery on the New York Mercantile Exchange were down 13.9 cents, or 4.6%, to settle at $2.628 per million British thermal units (mmBtu).

Futures for August NGQ24, which will soon be the front-month, were down over 4% and settled at $2.745 per mmBtu.

In Texas, the power grid operator for most of the state projected peak demand would break the record for the month of June on Thursday as homes and businesses crank up their air conditioners to escape the heat.

Spot power and gas prices in Texas also soared, but only to levels that were the highest in weeks and months.

SUPPLY AND DEMAND

Financial firm LSEG said gas output in the Lower 48 U.S. states had risen to an average 98.5 billion cubic feet per day (bcfd) so far in June, up from a 25-month low of 98.1 bcfd in May. That compares with a monthly record high of 105.5 bcfd in December 2023.

On a daily basis, however, output was on track to drop by about 2.8 bcfd over the past two days to a preliminary two-week low of 97.6 bcfd on Wednesday, down from an 11-week high of 100.4 bcfd on Monday.

Analysts said the production increase which started in late May was a sign that some drillers were slowly boosting output after a 47% jump in futures prices in April and May. Prices were also up about 4% so far in June.

So far this month, CEOs at EQT EQT.N and Chesapeake Energy CHK.O have said their companies have started to boost output.

Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 11.

But with less heat forecast next week, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 103.0 bcfd this week to 100.2 bcfd next week. Those forecasts were similar to LSEG's outlook on Tuesday.

Gas flows to the seven big U.S. LNG export plants have eased to 12.8 bcfd so far in June, down from 12.9 bcfd in May and a monthly record high of 14.7 bcfd in December 2023.

On a daily basis, LNG feedgas was on track to rise to 11.9 bcfd on Wednesday, up from a nine-week low of 11.7 bcfd on Tuesday.

That is due to plant and pipeline maintenance at several facilities, including Freeport LNG and Cheniere Energy's LNG.N Corpus Christi in Texas and Cameron LNG, Cheniere's Sabine Pass and Venture Global's Calcasieu Pass in Louisiana.

Feedgas to the 2.1-bcfd Freeport, one of the most watched U.S. LNG plants because it has a history of swaying global gas prices when it shuts, was on track to rise to 2.0 bcfd on Wednesday after dropping to a seven-week low of 1.5 bcfd on Tuesday.

That compares with an average of 1.9 bcfd over the past seven days.

Reporting by Scott DiSavino; Editing by Jan Harvey

For gas data on LSEG's Eikon type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.

For Interactive Map, type 'Interactive Map' in the box at upper left of the Eikon terminal

For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html

For next-day SNL U.S. gas prices, see: 0#SNL-NG

For next-day SNL U.S. power prices, see: 0#SNL-PWR

For U.S. natgas price and storage polls, see: NGAS/POLL

For U.S. nuclear power outages, see: NUKE/

For U.S. Northwest hydro power report, see: NWRFC

For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

For the U.S. natural gas speed guide, see: USGAS

For the U.S. power speed guide, see: USPOWER

To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)

NYMEX Henry Hub options and futures combined 0#3CFTC023651

NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B

NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C