Adds EQT production forecasts

By Scott DiSavino

July 24 (Reuters) -U.S. natural gas futures slid about 3% to a one-week low on Wednesday on forecasts for less demand next week than previously expected and expectations by EQT EQT.N, the nation's biggest gas producer, that output will rise during the second half of the year.

Another bearish factor keeping a lid on prices was the tremendous oversupply of gas still in storage.

There was still about 16% more gas in storage than normal for this time of year even though injections have been smaller than usual for nine of the past 10 weeks after several producers cut output earlier in the year when futures prices dropped to 3-1/2 year lows in February and March. EIA/GAS NGAS/POLL

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

EQT said late Tuesday that it produced about 508 billion cubic feet of gas equivalent (bcfe) in the second quarter and projected output would rise to around 510-560 bcfe in the third quarter and 515-565 bcfe in the fourth quarter.

Even though EQT kept its output forecast for all of 2024 flat at 2,100-2,200 bcfe, analysts noted the company's expectations that output would rise in the second half of the year came event though gas futures were down about 19% so far in July.

Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 7.0 cents, or 3.2%, to settle at $2.117 per million British thermal units, their lowest close since July 17.

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 83.2 degrees Fahrenheit (28.4 Celsius) on Aug. 2, according to LSEG data.

That would top the current record high temperature average of 83.0 F set on July 20, 2022 when power demand hit 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 33-month low on Monday.

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.

Meteorologists projected weather across the Lower 48 would remain mostly near normal through July 28 before turning hotter than normal through at least Aug. 8.

With hotter weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.2 bcfd this week to 105.8 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday, while the forecast for next week was lower.

Gas flows to the seven big U.S. LNG export plants fell to 11.6 bcfd so far in July after Freeport shut before Hurricane Beryl hit the Texas Coast on July 8, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.

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

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