UPDATE 1-US natgas prices ease 1% ahead of Labor Day weekend on forecasts for less heat

Adds latest prices

By Scott DiSavino

Aug 30 (Reuters) - U.S. gas futures eased about 1% on Friday ahead of the long U.S. Labor Day holiday weekend on bearish forecasts for slightly less heat over the two weeks than previously expected, which should reduce the amount of gas power generators burn to keep air conditioners humming.

That price decline came despite a bullish rise in gas flows to liquefied gas export plants with the return to full service of Freeport LNG's plant in Texas following an unexpected shutdown on Wednesday.

Another factor that has weighed on gas prices for much of this year was the tremendous oversupply of fuel left in storage after a mild winter.

There was still about 12% more gas in storage than for this time of year even though injections have been smaller than usual in 15 of the past 16 weeks after extremely low prices in the spring prompted several producers to cut output. EIA/GAS NGAS/POLL

Front-month gas futures NGc1 for October delivery on the New York Mercantile Exchange fell 1.0 cent, or 0.5%, to settle at $2.127 per million British thermal units (mmBtu). On Thursday, the contract closed at its highest since Aug. 21.

For the week, the front-month was up about 5% after falling about 5% last week.

For the month, the contract was up about 4% after falling about 22% in July, the biggest monthly decline since January 2023.

In the spot market, pipeline constraints caused -day gas prices at the Waha hub NG-WAH-WTX-SNL in the Permian Shale in West Texas to fall to an all-time low and average in territory for a record 32nd time this year.

Waha prices first averaged below zero in 2019. It happened 17 times in 2019, six times in 2020 and once in 2023.

SUPPLY AND DEMAND

Financial firm LSEG said gas output in the Lower 48 U.S. states slid to an average of 102.4 billion cubic feet per day (bcfd) so far in August, down from 103.4 bcfd in July.

Meteorologists forecast weather across the country would remain mostly hotter than through Sept. 14. Energy traders, however, that hot weather at the start of September would only average around 77 degrees F (25.0 degrees Celsius), versus 83 F (28.3 C) at the start of August.

LSEG forecast average gas demand in the Lower 48, including exports, will fall from 105.9 bcfd this week to 103.0 bcfd week and the week after. The forecast for week was higher than LSEG's outlook on Thursday.

Gas flows to the seven big U.S. LNG export plants rose to an average of 12.8 bcfd so far in August, up from 11.9 bcfd in July. That compares with a monthly record high of 14.7 bcfd in December 2023.

In Canada, LNG Canada said it expects to introduce gas to its 1.8-bcfd facility under construction in Kitimat, British Columbia, for the first time as it prepares to start up the plant and ship its first LNG cargoes by the middle of 2025.

Looking ahead, Berkshire Hathaway Energy's 0.8-bcfd Cove Point LNG export plant in Maryland will likely shut for about three weeks of routine annual maintenance around Sept. 20, according to the plant's history and to customers.

(Reporting by Scott DiSavino; Editing by Kirsten Donovan and Jonathan Oatis)

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

For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.

For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG terminal

For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html

For -day SNL U.S. gas prices, see: 0#SNL-NG

For -day SNL U.S. power prices, see: 0#SNL-PWR

For U.S.  price and storage polls, see: NGAS/POLL

For U.S.  power outages, see: NUKE/

For U.S. Northwest hydro power report, see: NWRFC

For U.S./Canada  gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

For the U.S.  gas speed guide, see: USGAS

For the U.S. power speed guide, see: USPOWER

To determine CFTC managed money  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