UPDATE 1-US natgas prices drop 4% on record output, mild weather

(Adds latest prices) Nov 7 (Reuters) - U.S. natural gas futures fell about 4% to a fresh one-week low on Tuesday on record output and forecasts for mild weather through late November, keeping heating demand low and allowing utilities to continue injecting gas into storage for a couple more weeks. Front-month gas futures for December delivery on the New York Mercantile Exchange fell 12.4 cents, or 3.8%, to settle at $3.140 per million British thermal units (mmBtu), putting the contract on track for its lowest close since Oct. 25. 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, adding to the market volatility. EIA will resume its regular schedule next week. One bearish factor that has weighed on the futures market has been lower spot or next-day prices at the Henry Hub benchmark in Louisiana. The spot market has traded below front-month futures for 176 out of 212 trading days so far this year, according to data from LSEG. Next-day prices at the Henry Hub fell about 10% to $2.71 per mmBtu for Tuesday. This front-month to second-month contango rose to a record high for a fourth day in a row with the premium of January futures over December reaching around 32 cents per mmBtu. That premium could encourage some speculators to leave gas in storage for longer in hope of higher prices later in the winter. Utilities, however, will start to pull gas from storage in mid to late November as daily heating demand for the fuel starts to exceed production. SUPPLY AND DEMAND LSEG said average gas output in the Lower 48 U.S. states rose to 107.1 billion cubic feet per day (bcfd) so far in November, from a record 104.2 bcfd in October. On a daily basis, after hitting a record 108.0 bcfd on Nov. 4, output was on track to drop by around 2.5 bcfd to a preliminary one-week low of 105.2 bcfd on Tuesday. Traders noted preliminary data is often revised later in the day. Meteorologists projected the weather would remain mostly warmer than normal through Nov. 22. But with the weather turning seasonally cooler with the coming of winter, LSEG forecast U.S. gas demand in the Lower 48 states, including exports, would jump from 100.3 bcfd this week to 108.3 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday. Pipeline exports to Mexico fell to an average of 5.3 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 4.4 bcfd on Tuesday. Analysts expect U.S. exports to Mexico to rise in coming months once U.S. company New Fortress Energy's plant in Altamira starts pulling in U.S. gas to turn into LNG for export in November. New Fortress and Mexico's PEMEX scrapped a deal in which New Fortress was to install a liquefied natural gas (LNG) production facility at PEMEX's Lakach gas field in the Gulf of Mexico. Gas flows to the seven big U.S. LNG export plants rose to an average of 14.2 bcfd so far in November, up from 13.7 bcfd in October and a record 14.0 bcfd in April. That increase in gas flows came even though all three liquefaction trains at the Freeport LNG plant tripped off line in an event lasting several hours on Sunday. 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): 21 79 83 36 U.S. total natgas in storage (bcf): 3,800 3,779 3,569 3,610 U.S. total storage versus 5-year average 5.3% 5.7% 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 3.19 3.26 6.43 6.54 2.89 Title Transfer Facility (TTF) 14.28 14.16 35.88 40.50 7.49 Japan Korea Marker (JKM) 17.45 17.57 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 220 211 302 259 267 U.S. GFS CDDs 14 16 17 15 13 U.S. GFS TDDs 234 227 319 274 280 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 105.6 107.2 107.4 99.4 94.4 U.S. Imports from Canada 7.2 7.5 7.7 7.3 8.3 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 113.2 114.8 115.1 106.7 102.8 U.S. Demand (bcfd) U.S. Exports to Canada 2.0 2.3 2.4 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 13.7 13.4 11.6 7.9 U.S. Commercial 10.3 8.9 11.0 8.6 11.7 U.S. Residential 14.8 12.1 16.5 11.8 17.5 U.S. Power Plant 31.0 27.8 27.7 20.1 27.5 U.S. Industrial 23.9 22.6 23.3 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 78.9 86.3 70.8 88.6 Total U.S. Demand 109.8 100.3 108.3 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 93 92 83 107 81 Jan-Jul 89 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 2.71 3.00 Transco Z6 New York 1.51 1.34 PG&E Citygate 4.75 5.08 Eastern Gas (old Dominion South) 1.48 1.40 Chicago Citygate 1.86 2.11 Algonquin Citygate 1.68 1.53 SoCal Citygate 8.26 6.05 Waha Hub 0.24 0.69 AECO 1.87 1.87 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 31.75 24.75 PJM West 30.00 34.75 Ercot North 36.25 32.00 Mid C 57.75 60.00 Palo Verde 38.50 49.50 SP-15 36.00 47.75 (Reporting by Scott DiSavino; editing by Alexander Smith and Mark Heinrich)