Adds latest prices

By Scott DiSavino

June 24 (Reuters) - U.S. natural gas futures fell about 4% to a one-week low on Tuesday on rising output so far this month and forecasts for lower demand over the next two weeks than previously expected with the heat wave blanketing the eastern half of the country expected to break in a day or two.

The gas market also followed oil prices lower - U.S. crude futures CLc1 dropped about 9% on Monday and 6% on Tuesday - on expectations the ceasefire between Israel and Iran will reduce the risk of oil and liquefied natural gas $(LNG)$ supply disruptions in the Middle East. O/R

Gas futures for July delivery NGc1 on the New York Mercantile Exchange fell 15.1 cents, or 4.1%, to settle at $3.537 per million British thermal units (mmBtu), their lowest close since June 12.

One factor that has weighed on gas prices since mid-April was the growing surplus of gas in storage.

Even though the weather was hotter than normal last week, analysts projected energy firms still injected more gas into storage than usual, likely boosting stockpiles to around 6% above the five-year average for this time of year. EIA/GAS NGAS/POLL

The brutal heat this week boosted power prices in some parts of the country to their highest since January as homes and businesses cranked up air conditioners, stressing regional power grids.

Next-day power prices in New England E-NEPLMHP-IDX jumped about 17% to around $189 per megawatt hour (MWh) for Tuesday, while spot power in the Pennsylvania-New Jersey-Maryland (PJM) region at the PJM West hub E-PJWHDAP-IDX held over $200 for a second day in a row.

That compares with an average of $81 per MWh in New England so far this year and $47 in calendar 2024, and an average of $56 in PJM so far this year and $42 in calendar 2024.

The PJM grid covers all or parts of 13 states from New Jersey to Illinois.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 105.5 billion cubic feet per day so far in June, up from 105.2 bcfd in May, but still below the monthly record high of 106.3 bcfd in March due primarily to normal spring pipeline maintenance.

On a daily basis, however, output was on track to drop by around 1.8 bcfd to a preliminary two-week low of 104.8 bcfd on Tuesday. Analysts have noted that preliminary data is often revised later in the day.

Meteorologists forecast weather across the Lower 48 states will remain mostly warmer than normal through at least July 9.

With more summer heat still to come, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 102.8 bcfd this week to 104.9 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday.

The average amount of gas flowing to the eight big U.S. LNG export plants fell to 14.1 bcfd so far in June, down from 15.0 bcfd in May and a monthly record high of 16.0 bcfd in April.

On a daily basis, however, feedgas was on track to rise from 13.8 bcfd on Monday to a preliminary 15.0 bcfd on Tuesday on signs Cheniere Energy's LNG.N 4.5-bcfd Sabine Pass export plant in Louisiana was exiting a maintenance reduction.

Traders said LNG feedgas reductions since April were primarily due to normal spring maintenance, including work at Cameron LNG's 2.0-bcfd plant in Louisiana and Cheniere's Sabine and 3.9-bcfd Corpus Christi plant in Texas, and short, unplanned unit outages at Freeport LNG's 2.1-bcfd plant in Texas on May 6, May 23, May 28, June 3 and June 17.

(Reporting by Scott DiSavino, Editing by Nick Zieminski and Marguerita Choy)

((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net/))

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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

To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)

NYMEX Henry Hub options and futures combined 0#3CFTC023651

NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B

NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C