By Scott DiSavino

July 30 (Reuters) -U.S. natural gas futures slid about 2% on Tuesday on rising output and forecasts for lower demand over the next two weeks than previously expected.

On its first day as the front-month, gas futures NGc1 for September delivery on the New York Mercantile Exchange fell 1.4 cents, or 0.7%, from where the contract closed on Monday to $2.022 per million British thermal units at 9:38 a.m. EDT (1338 GMT).

That, however, still put the front-month up about 5% from where the lower-priced August contract closed on Monday, when it was still the front-month. The August contract settled at $1.907 per mmBtu, the lowest close since April 26.

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

At the same time, the amount of gas flowing to Freeport LNG in Texas was on track to reach a preliminary 14-month high on Tuesday after the plant slowly returned to full service following a nine-day outage for Hurricane Beryl in early July.

Analysts said the combination of higher gas use by power generators and rising LNG exports could cause utilities to take the unusual step of pulling gas out of storage during the first 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 23% so far in July, some analysts think producers may keep their drilling activities reduced for longer.

"Given continued weak market dynamics, the company is executing its previously disclosed plan to defer completions ... building short-cycle, capital-efficient productive capacity, which can be activated when supply and demand imbalances correct," Chesapeake said in its second-quarter earnings release on Monday.

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 55.0 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 11% this week.

With more heat coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.2 bcfd this week to 111.3 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday.

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

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NYMEX Henry Hub futures only 0#1CFTC023651

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