UPDATE 1-US natgas prices slip 2% on forecasts for less demand next week

(Adds latest prices) July 21 (Reuters) - U.S. natural gas futures fell about 2% on Friday as forecasts for less demand next week than previously expected offset lower daily output and hotter-than-normal weather seen through early August, especially in Texas and California. Power demand in Texas hit a record high for a second day in a row on Tuesday and will likely break that record on Friday and again next week as homes and businesses keep air conditioners cranked up to escape a lingering heatwave, said the Electric Reliability Council of Texas (ERCOT), the state's power grid operator. Extreme heat boosts the amount of gas burned to produce power for cooling, especially in Texas, which gets most of its electricity from gas-fired plants. In 2022, about 49% of the state's power came from gas-fired plants, with most of the rest coming from wind (22%), coal (16%), nuclear (8%) and solar (4%), federal energy data showed. The California Independent System Operator (ISO), the state's grid operator, declared an emergency alert for about an hour late Thursday as the sun went down and solar power was on the decline "due to heat conditions and higher than anticipated demand." The California ISO, which does not anticipate the need to ask customers to conserve energy on Friday, said the emergency ended after it secured additional unidentified resources. Its website showed imports from other states increased around that time. In the spot market, soaring power demand in California boosted some next-day electric and gas prices in the U.S. West to their highest in three months, including power at the Mid Columbia Hub in the Pacific Northwest, where much of California's electric imports come from. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 4.4 cents, or 1.6%, to settle at $2.713 per million British thermal units. On Thursday, the contract closed at its highest since June 30. For the week, the contract was up about 7%, erasing most of its losses of around 9% during the prior two weeks. SUPPLY AND DEMAND Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 101.5 billion cubic feet per day (bcfd) so far in July, from 101.0 bcfd in June. That compares with a monthly record of 101.8 bcfd in May. On a daily basis, however, output was on track to drop by 1.8 bcfd to a preliminary five-week low of 99.4 bcfd on Friday due mostly to declines in Pennsylvania and Colorado. Analysts have noted preliminary data was often revised later in the day. Meteorologists forecast hotter-than-normal weather in the Lower 48 states through at least Aug. 5. With power generators expected to burn even more gas in coming weeks and LNG export plants consuming more of the fuel as they exit maintenance outages, Refinitiv forecast U.S. gas demand, including exports, would rise from 105.7 bcfd this week and next to 107.7 bcfd in two weeks. The forecast for next week was lower than Refinitiv's outlook on Thursday. Gas flows to the seven big U.S. LNG export plants rose to an average of 12.7 bcfd so far in July from 11.6 bcfd in June. That was still well below the monthly record of 14.0 bcfd in April due to ongoing maintenance at several facilities in Louisiana, including Cameron LNG, Cheniere Energy's Sabine Pass and Venture Global LNG's Calcasieu. Week ended Week ended Year ago Five-year Jul 21 Jul 14 Jul 21 average Forecast Actual Jul 21 U.S. weekly natgas storage change (bcf): 36 41 31 18 U.S. total natgas in storage (bcf): 3,007 2,971 2,414 2,642 U.S. total storage versus 5-year average 13.8% 13.8% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 2.77 2.76 7.19 6.54 2.89 Title Transfer Facility (TTF) 9.91 9.29 51.76 40.50 7.49 Japan Korea Marker (JKM) 10.92 10.75 39.36 34.11 8.95 Refinitiv 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 3 2 2 3 3 U.S. GFS CDDs 254 255 248 213 204 U.S. GFS TDDs 257 257 250 216 207 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Week Next Week This Week Five-Year Last Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 101.4 101.2 100.9 97.1 90.5 U.S. Imports from Canada 10.2 7.4 7.4 8.9 8.2 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 111.6 108.7 108.4 106.0 98.8 U.S. Demand (bcfd) U.S. Exports to Canada 4.4 1.9 1.7 4.2 2.4 U.S. Exports to Mexico 6.8 6.6 6.9 6.2 5.5 U.S. LNG Exports 12.4 12.7 12.5 10.6 6.1 U.S. Commercial 4.4 4.3 4.4 4.4 4.5 U.S. Residential 3.6 3.5 3.5 3.6 3.6 U.S. Power Plant 44.4 48.0 47.9 46.3 41.7 U.S. Industrial 21.2 21.3 21.4 21.3 21.1 U.S. Plant Fuel 5.0 5.0 5.0 5.0 5.0 U.S. Pipe Distribution 2.2 2.3 2.2 2.3 2.2 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 81.0 84.6 84.5 83.0 78.2 Total U.S. Demand 104.7 105.7 105.6 104.0 92.2 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2022 2021 2020 % of Normal % of Normal % of Normal % of Normal % of Normal Forecast Forecast Actual Actual Actual Apr-Sep 83 83 107 81 103 Jan-Jul 77 77 102 79 98 Oct-Sep 76 75 103 81 95 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Jul 21 Jul 14 Jul 7 Jun 30 Jun 23 Wind 7 7 6 10 9 Solar 4 4 4 4 4 Hydro 5 6 6 6 6 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 46 45 45 43 42 Coal 19 19 19 18 17 Nuclear 17 17 18 17 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.61 2.51 Transco Z6 New York 1.69 1.65 PG&E Citygate 5.63 4.90 Eastern Gas (old Dominion South) 1.55 1.51 Chicago Citygate 2.36 2.31 Algonquin Citygate 1.70 1.75 SoCal Citygate 6.69 5.67 Waha Hub 2.45 2.35 AECO 1.83 1.81 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 31.00 34.00 PJM West 36.75 39.00 Ercot North 140.00 175.00 Mid C 137.00 129.50 Palo Verde 112.25 86.50 SP-15 102.50 91.25 (Reporting by Scott DiSavino; Editing by Marguerita Choy and Richard Chang)