UPDATE 1-US natgas prices edge up 1% to 3-week high on declining output

(Adds latest prices) By Scott DiSavino April 2 (Reuters) - U.S. natural gas futures edged up about 1% to a fresh three-week high as producers continued to cut output over the past month or so after gas prices fell to 3-1/2-year lows in both February and March due to ample amounts of fuel in storage and months of mostly mild weather. Gains were limited by lowered forecasts for demand this week, with reduced amounts of gas flowing to liquefied natural gas (LNG) export plants due to ongoing repairs at Freeport LNG's export plant in Texas and reductions at other plants. Front-month gas futures for May delivery on the New York Mercantile Exchange rose 2.5 cents, or 1.4%, to settle at $1.862 per million British thermal units (mmBtu). It was the second daily close that was the highest since March 6 when prices closed at $1.929 mmBtu. Gas prices have been depressed for months - falling to an intraday low of $1.481 per mmBtu on March 26, their lowest since June 2020 - after a mild winter with record output allowed utilities to leave significantly more gas in storage than usual for this time of year. Analysts estimated current gas stockpiles were around 41% above normal levels. Low prices should boost U.S. gas use to a record high in 2024 but cut production for the first time since COVID-19 pandemic lockdowns in 2020, according to the U.S. Energy Information Administration's latest outlook. Output was already down by around 9% over the past month as several energy firms, including EQT and Chesapeake Energy , delayed well completions and cut back on other drilling activities. In the spot market, meanwhile, mild weather and ample hydro and other renewable power supplies in the U.S. West cut electricity prices in California and Arizona to record lows below zero in recent days. SUPPLY AND DEMAND Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.8 billion cubic feet per day (bcfd) so far in April, down from 100.8 bcfd in March. That compares with a monthly record high of 105.6 bcfd in December 2023. On a daily basis, output was on track to drop about 4.1 bcfd to a preliminary 10-week low of 96.3 bcfd. Analysts, however, noted preliminary data is usually revised, especially early in the month preliminary data. Meteorologists projected weather across the Lower 48 would remain mostly warmer than normal through April 16, except for some cold days from April 3-7. With seasonally warmer weather coming, LSEG forecast gas demand in the Lower 48, including exports, would fall from 102.6 bcfd this week to 101.0 bcfd next week. The forecast for this week was lower than LSEG's outlook on Monday. Gas flows to the seven big U.S. LNG export plants fell to an average of 11.9 bcfd so far in April, down from 13.1 bcfd in March. That compares with a monthly record of 14.7 bcfd in December. On a daily basis, LNG feedgas fell to a 10-week low of 11.3 bcfd due in part to reductions at Cheniere Energy's Corpus Christi in Texas and Sabine Pass in Louisiana in addition to ongoing work at Freeport LNG. Analysts do not expect U.S. LNG feedgas to return to record levels until all three liquefaction trains at Freeport LNG's export plant in Texas return to service. Freeport has said it expects Trains 1 and 2 to remain shut until May for inspections and repairs, while Train 3 was operating. Each Freeport train can turn about 0.7 bcfd of gas into LNG. Week ended Week ended Year ago Five-year Mar 22 Mar 15 Mar 15 average Actual Actual Mar 15 U.S. weekly natgas storage change (bcf): -36 +7 -55 -27 U.S. total natgas in storage (bcf): 2,296 2,332 1,866 1,627 U.S. total storage versus 5-year average 41.1% 41.0% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year Last Year Average Average 2023 (2018-2022) Henry Hub 1.82 1.84 2.20 2.66 3.60 Title Transfer Facility (TTF) 8.41 8.62 13.49 13.04 14.39 Japan Korea Marker (JKM) 9.54 9.54 12.34 14.39 14.31 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 167 158 146 192 184 U.S. GFS CDDs 20 24 34 28 26 U.S. GFS TDDs 187 182 180 220 210 LSEG U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year (2019-2023) Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 100.5 99.6 100.1 101.5 95.0 U.S. Imports from Canada 7.7 7.2 7.0 7.4 7.8 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0 Total U.S. Supply 108.2 106.8 107.1 108.9 102.8 U.S. Demand (bcfd) U.S. Exports to Canada 3.4 2.9 2.5 2.0 2.4 U.S. Exports to Mexico 6.2 6.1 6.2 5.9 5.4 U.S. LNG Exports 12.9 12.1 12.2 13.9 10.1 U.S. Commercial 11.7 9.4 8.8 9.3 8.4 U.S. Residential 17.5 13.5 12.5 13.5 11.8 U.S. Power Plant 29.3 27.8 28.2 28.9 22.7 U.S. Industrial 24.5 23.5 23.4 21.9 25.9 U.S. Plant Fuel 5.0 4.9 4.9 4.9 5.0 U.S. Pipe Distribution 2.4 2.2 2.1 2.2 2.3 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 90.5 81.5 80.2 80.8 76.2 Total U.S. Demand 113.0 102.6 101.0 102.6 94.1 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 83 81 83 107 81 Jan-Jul 84 82 77 102 79 Oct-Sep 84 82 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Apr 5 Mar 29 Mar 22 Mar 15 Mar 8 Wind 15 16 13 15 15 Solar 5 5 5 5 4 Hydro 8 8 8 8 7 Other 1 1 1 1 1 Petroleum 0 0 0 0 0 Natural Gas 37 38 40 38 39 Coal 12 13 13 12 13 Nuclear 22 19 20 21 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 1.64 1.53 Transco Z6 New York 1.66 1.59 PG&E Citygate 2.33 2.24 Eastern Gas (old Dominion South) 1.55 1.34 Chicago Citygate 1.64 1.49 Algonquin Citygate 1.87 1.60 SoCal Citygate 1.95 1.69 Waha Hub 1.25 0.17 AECO 1.18 1.18 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 27.75 24.25 PJM West 31.00 19.75 Ercot North 17.75 10.50 Mid C 27.33 36.33 Palo Verde -4.50 -12.00 SP-15 -4.25 0.75 (Reporting by Scott DiSavino; Editing by Bernadette Baum and David Gregorio)