UPDATE 1-US natgas prices ease to 2-week low on record output, mild weather

(Adds latest prices, analyst comment) Nov 8 (Reuters) - U.S. natural gas futures eased about 1% to a two-week low on Wednesday on record output and forecasts for mild weather through late November that should limit heating demand and allow utilities to keep injecting gas into storage for a couple more weeks. Front-month gas futures for December delivery on the New York Mercantile Exchange fell 3.4 cents, or 1.1%, to settle at $3.106 per million British thermal units (mmBtu), putting the contract on track for its lowest close since Oct. 25 for a second day in a row. The premium of March 2024 futures over April 2024 fell by 16% to a record low of 11 cents per mmBtu, according to data from financial firm LSEG going back to 2018. "It would be a very bearish signal for natural gas heating fuel if anything winter trades below anything summer, but natural gas is drifting in that direction," said Bob Yawger, director of energy futures at Mizuho Bank. "There is no cold weather anyplace in the U.S. through the next two weeks." The industry calls the March-April spread the "widow maker" because rapid price moves resulting from changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006. The industry uses the March-April spread to bet on winter weather forecasts since March is the last month of winter heating season when utilities pull gas out of storage. A smaller March premium generally means the industry expects an easy or mild winter. Looking ahead, the U.S. Energy Information Administration (EIA) said it would not release its weekly gas storage report on Thursday due to a planned systems upgrade. EIA will resume its regular schedule next week. Analysts forecast utilities pulled about seven billion cubic feet of gas from storage during the week ended Nov. 3, the first withdrawal of the 2023/2024 winter season. In Texas, voters approved a constitutional amendment on Tuesday to create a $10 billion fund to build mostly gas-fired power plants and other electric infrastructure. The amendment is one of several efforts by the state to avoid another energy crisis like the one caused by a deadly winter storm in February 2021 that left millions without power, water and heat for days due to the shutdown of an unusually large amount of generation. SUPPLY AND DEMAND LSEG said average gas output in the Lower 48 U.S. states rose to 107.0 billion cubic feet per day (bcfd) so far in November, up from a record 104.2 bcfd in October. Meteorologists projected the weather would remain mostly warmer than normal through Nov. 23. Despite the warm weather, temperatures are still declining with the coming of winter. LSEG forecast that cooler weather would cause U.S. gas demand in the Lower 48 states, including exports, to jump from 100.6 bcfd this week to 108.8 bcfd next week. Those forecasts were higher than LSEG's outlook on Tuesday. Pipeline exports to Mexico fell to an average of 5.4 bcfd so far in November, down from 6.5 bcfd in October and a record 7.0 bcfd in August. On a daily basis, exports to Mexico were on track to fall to an eight-month low of 4.5 bcfd on Wednesday. Analysts expect U.S. exports to Mexico to rise once U.S.-based New Fortress Energy's plant in Altamira starts pulling in U.S. gas to turn into LNG for export by the end of the year. Gas flows to the seven big U.S. LNG export plants rose to an average of 13.8 bcfd so far in November, up from 13.7 bcfd in October and a record 14.0 bcfd in April. Week ended Week ended Year ago Five-year Nov 3 Oct 27 Nov 3 average Forecast Actual Nov 3 U.S. weekly natgas storage change (bcf): -7 +79 +83 +36 U.S. total natgas in storage (bcf): 3,772 3,779 3,569 3,610 U.S. total storage versus 5-year average 5.7% 4.5% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 3.11 3.14 6.43 6.54 2.89 Title Transfer Facility (TTF) 14.16 14.61 35.88 40.50 7.49 Japan Korea Marker (JKM) 17.36 17.45 28.37 34.11 8.95 LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year Norm Norm U.S. GFS HDDs 217 220 302 259 272 U.S. GFS CDDs 12 14 17 15 12 U.S. GFS TDDs 229 234 319 274 284 LSEG U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 105.6 107.0 107.1 99.4 94.4 U.S. Imports from Canada 7.2 7.5 7.6 7.3 8.3 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 113.2 114.5 114.7 106.7 102.8 U.S. Demand (bcfd) U.S. Exports to Canada 2.0 2.3 2.3 2.3 2.9 U.S. Exports to Mexico 6.1 5.5 6.2 5.0 5.3 U.S. LNG Exports 14.2 13.8 13.6 11.6 7.9 U.S. Commercial 10.3 8.9 11.1 8.6 11.7 U.S. Residential 14.8 12.0 16.6 11.8 17.5 U.S. Power Plant 31.0 28.1 27.9 20.1 27.5 U.S. Industrial 23.9 22.6 23.4 22.7 24.3 U.S. Plant Fuel 5.2 5.3 5.3 5.2 5.2 U.S. Pipe Distribution 2.3 2.1 2.3 2.3 2.3 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 87.6 79.1 86.7 70.8 88.6 Total U.S. Demand 109.8 100.6 108.8 89.7 104.7 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021 % of Normal % of Normal % of Normal % of Normal % of Normal Forecast Forecast Actual Actual Actual Apr-Sep 92 93 83 107 81 Jan-Jul 88 89 77 102 79 Oct-Sep 89 89 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Nov 10 Nov 3 Oct 27 Oct 20 Oct 13 Wind 11 14 10 10 Solar 4 4 4 4 Hydro 5 5 5 5 Other 1 2 2 2 Petroleum 0 0 0 0 Natural Gas 40 40 42 41 Coal 19 16 17 16 Nuclear 19 19 20 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.00 2.71 Transco Z6 New York 1.65 1.51 PG&E Citygate 3.88 4.75 Eastern Gas (old Dominion South) 1.49 1.48 Chicago Citygate 1.75 1.86 Algonquin Citygate 2.02 1.68 SoCal Citygate 7.65 8.26 Waha Hub 0.94 0.24 AECO 1.48 1.87 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 28.25 31.75 PJM West 32.75 30.00 Ercot North 77.00 36.25 Mid C 80.00 57.75 Palo Verde 54.43 38.50 SP-15 42.00 36.00 (Reporting by Scott DiSavino; Editing by Paul Simao and David Gregorio)