By Scott DiSavino

July 31 (Reuters) -U.S. natural gas futures slid about 3% on Wednesday on rising output and forecasts for less hot weather and lower gas demand next week than previously expected.

That price decline came despite forecasts for record-breaking heat later this week that could boost the amount of gas power generators burn to an all-time high.

Front-month gas futures NGc1 for September delivery on the New York Mercantile Exchange fell 5.4 cents, or 2.5%, to $2.072 per million British thermal units (mmBtu) at 9:17 a.m. EDT (1317 GMT).

For the month, the contract was down about 20% after gaining about 48% during the prior three months.

In the spot market, gas prices at the Waha hub NG-WAH-WTX-SNL in the West Texas Permian Shale turned negative for a third time in July, even as a record-breaking heat wave could boost U.S. power demand to an all-time high as homes and businesses crank up their air conditioners.

In the Pennsylvania-New Jersey-Maryland region, meanwhile, next-day power at the PJM West hub EL-PK-PJMW-SNL fell to $14 per megawatt hour, its lowest since April 2021.

Analysts said higher gas use by power generators could cause utilities to take the unusual step of pulling gas out of storage during the second week of August. That would be the first weekly storage withdrawal in August since 2006.

There was currently about 17% more gas in storage than normal for this time of year. EIA/GAS NGAS/POLL

Storage builds have been mostly smaller than usual in recent weeks, because several producers cut output earlier this 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 slowly boost output.

But with prices down about 20% so far in July, some analysts think producers could decide to keep their drilling activities on hold for longer.

In other news, the U.S. National Hurricane Center said a tropical disturbance in the Atlantic Ocean has a 60% chance of strengthening into a cyclone that could hit the U.S. East Coast somewhere between Florida and North Carolina over the next seven days.

Analysts said an East Coast storm could reduce gas demand by cutting power use through outages and cooler weather.

SUPPLY AND DEMAND

Financial firm LSEG said gas output in the Lower 48 states rose to an average of 102.5 billion cubic feet per day (bcfd) so far in July, up from 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May. U.S. output hit a monthly record of 105.5 bcfd in December 2023.

Meteorologists forecast temperatures across the Lower 48 states will average 83.5 degrees Fahrenheit (28.6 Celsius) on Aug. 1 and 83.9 F on Aug. 2, according to LSEG data.

That would top the daily record high average temperature of 83.0 F set on July 20, 2022, when power demand peaked at an all-time high of 742,600 megawatts, LSEG and federal energy data showed.

To keep air conditioners humming during that record heat, LSEG forecast power generators would burn about 54.8 bcfd of gas on Aug. 2, which would top the all-time high of 54.1 bcfd reached on July 9 when generators had to burn more gas due to a lack of wind power.

But the amount of wind power was on track to rise from 4% last week to around 10% this week.

With more heat coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.3 bcfd this week to 110.7 bcfd next week. The forecast for next week was lower than LSEG's outlook on Tuesday.

Reporting by Scott DiSavino; Editing by David Holmes

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