Adds latest prices

By Scott DiSavino

June 12 (Reuters) -U.S. natural gas futures fell about 3%on Wednesday on expectations that supplies will soon rise with the approved startupof the Mountain Valley gas pipe and news about plans by EQT EQT.N, the nation's biggest gas producer, to boost output.

Federal energy regulators approved the startup of the Mountain Valley Pipeline from West Virginia to Virginia late Tuesday.

Analysts expect the Mountain Valley startup will allow Appalachian producers to slowly boost output in coming months as other energy firms fix constraints on connecting pipes in Virginia and other states, allowing gas flows on Mountain Valley to reach the pipe's full 2-billion-cubic-feet-per-day(bcfd) capacity.

In other news, EQT EQT.N CEO Toby Rice told Natural Gas Intelligence at the LDC Gas Forums Northeast conference in Boston that EQT started to bring back some of the 1 bcfd of production it started to curtail in February when gas prices dropped. With gas prices rising in April and May, analysts said they sawsigns that EQT and other producers started to boost output again in May.

Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 8.4 cents, or 2.7%, to settle at $3.045 per million British thermal units (mmBtu).On Tuesday, the contract closed at its highest price since Jan. 12.

The futures price decline came despite an ongoing drop in output so far in June and forecasts for hotter weather through at least the end of the month that should boost the amount of gas power generators need to burn to keep air conditioners humming.

Other factors keeping a lid on futures prices this year include consistently lower spot prices at the U.S. Henry Hub benchmark NG-W-HH-SNL in Louisiana and the oversupply of gas in storage despite six weeks of smaller-than-usualstorage builds.

Analysts said current gas stockpiles were still around 24% above normal levels for this time of year. EIA/GAS NGAS/POLL

SUPPLY AND DEMAND

Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.7 bcfd so far in June, from 98.1 bcfd in May. That compares with a monthly record of 105.5 bcfd in December 2023.

On a daily basis, output was on track to drop by around 2.3 bcfd over the past five days to a preliminary 21-week low of 95.7 bcfd on Wednesday. Traders, however, noted preliminary data is often revised later in the day.

Before recent output declines in June, analysts said increases in May were a sign producers were slowly boosting output due to a 47% jump in futures prices in April and May. Output hit a six-week high of 99.5 bcfd on May 24.

Overall, U.S. gas production has remained down 8% so far in 2024 after several energy firms, including EQT EQT.N and Chesapeake Energy CHK.O, delayed well completions and cut drilling activities when prices fell in February and March.

Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least June 27.

LSEG forecast gas demand in the Lower 48, including exports, would jump from 95.3 bcfd this week to 98.9 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday.

Gas flows to the seven big U.S. LNG export plants rose to 13.1 bcfd so far in June, from 12.9 bcfd in May.

Reporting by Scott DiSavino; Editing by Rod Nickel 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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NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

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