Adds closing prices

By Scott DiSavino

July 8 (Reuters) -U.S. natural gas futures climbed about 2% on Monday on forecasts for more demand next week than previously expected as a brutal heat wave continues to blanket much of the country, forcing power generators to burn more gas to produce electricity to keep air conditioners humming.

Theprice increase came despite forecasts for less demand this week than previously expected, rising output and a drop in the amount of gas flowing to liquefied natural gas (LNG) export plants after Freeport LNG in Texas shutahead of Hurricane Beryl.

Hurricane Beryl lashed Texas with strong winds and heavy rains as it churned inland, forcing the closure of oil ports, cancellation of hundreds of flights and leaving over 2.7million homes and businesses without power.

Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange rose 4.7 cents, or 2.0%, to settle at $2.366 per million British thermal units (mmBtu).

It was the front month's first price gain in six days and pushed the contract out oftechnically oversold territory for the first time in four days.

SUPPLY AND DEMAND

Higher prices in recent weeks haveprompted some producers, including EQT EQT.N and Chesapeake Energy CHK.O, to start pulling more gas out of the ground.

EQT is the nation's biggest gas producer, and Chesapeake is on track to become the biggest after its planned merger with Southwestern Energy SWN.N.

Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.4 billion cubic feet per day (bcfd) so far in July. On a daily basis, output hit a 17-week high of 103.0 bcfd on Sunday.

That was up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May when many producers reduced drilling activities after prices fell to 3-1/2-year lows in February and March. U.S. output hit a monthly record high of 105.5 bcfd in December 2023.

Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 23.

With hotter weather expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.7 bcfd this week to 107.0 bcfd next week. The forecast for this week was lower than LSEG's outlook on Friday, while the forecast for next week was higher.

Gas flows to the seven big U.S. LNG export plants fell to 12.1 bcfd so far in July after Freeport LNG in Texas ramped down ahead of Hurricane Beryl on Sunday, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.

The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's invasion of Ukraine.

Gas was trading at $10 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and $12 at the Japan Korea Marker (JKM) benchmark in Asia JKMc1. NG/EU

Reporting by Scott DiSavino
Editing by Peter Graff and Leslie Adler

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

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