By Scott DiSavino

July 25 (Reuters) -U.S. natural gas futures eased about 1% to a one-week low on Thursday on rising output and forecasts for less demand next week than previously expected ahead of a federal report expected to show last week's storage build was smaller than usual for a 10th time in 11 weeks.

Traders said recent storage builds have mostly been smaller than usual because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March.

Higher prices in April and May, however, prompted some drillers, including EQT EQT.N and Chesapeake Energy CHK.O, to boost output.

Analysts forecast U.S. utilities added 16 billion cubic feet (bcf) of gas into storage during the week ended July 19. That compares with an increase of 23 bcf in the same week last year and a five-year (2019-2023) average rise of 31 bcf for this time of year. EIA/GAS NGAS/POLL

If correct, that will leave gas stocks about 16% above normal for this time of year.

Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 2.6 cents, or 1.2%, to $2.091 per million British thermal units at 9:46 a.m. EDT (1346 GMT), putting the contract on track for its lowest close since July 17 for a second day in a row.

That price decline came despite the latest weather forecast calling for extreme heat to return in August, which should boost the amount of gas power generators burn to produce electricity to keep air conditioners humming.

Meteorologists forecast temperatures across the Lower 48 states will average around 83.0 degrees Fahrenheit (28.3 Celsius) on Aug. 2, according to LSEG data.

That would match the current record high average temperature set on July 20, 2022 when power demand peaked at an all-time high of 742,600 megawatts, according to federal energy data.

In addition to the heat, power generators were burning more gas this week after the amount of electricity produced by wind farms in the Lower 48 states fell to a preliminary 59-month low on Tuesday.

That drop in wind power came even though energy firms have added about 53.3 gigawatts (GW) of wind over the past five years (2019-2023), bringing total wind capacity up to around 147.6 GW by the end of 2023, according to EIA data.

That is an average capacity increase of about 9% a year over the past five years and makes wind power the nation's third biggest source of power capacity behind gas at 490.8 GW and coal at 177.1 GW.

But, power companies get a lot more energy out of those gas and coal plants. Gas was producing about 49% of the country's power so far this week, with the rest coming from coal at 18%, nuclear at 18%, hydro and solar at 5% each, wind at 3% and other at 1%.

SUPPLY AND DEMAND

Financial firm LSEG said gas output in the Lower 48 states rose to an average of 102.4 billion cubic feet per day (bcfd) so far in July, up from an average of 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May.

U.S. output hit a monthly record high of 105.5 bcfd in December 2023.

With more wind power expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will ease from 105.5 bcfd this week to 105.3 bcfd next week. The forecast for this week was higher than LSEG's outlook on Wednesday, while the forecast for next week was lower.

Reporting by Scott DiSavino, Editing by Nick Zieminski

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

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NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C