UPDATE 2-US natgas logs best day in two weeks on higher demand forecast

(Updates with settlement prices) Dec 14 (Reuters) - U.S. natural gas futures rose on Thursday as support from raised demand forecasts for this week overshadowed rising output. Front-month gas futures for January delivery on the New York Mercantile Exchange settled 6.9 cents higher at $2.40 per million British thermal units (mmBtu), logging its best session in two weeks. "Weather was sort of mixed, which is helping the market that was oversold ... There was no shock as the storage report came within expectations," said Gary Cunningham, director of market research at Tradition Energy. The U.S. Energy Information Administration (EIA), meanwhile, said utilities pulled 55 billion cubic feet (bcf) of gas from storage during the week ended Dec. 8. That was almost in line with the 54-bcf decline analysts forecast in a Reuters poll and compared with a withdrawal of 46 bcf during the same week a year ago and a five-year (2018-2022) average decrease of 81 bcf for this time of year. Despite the small price gain, with production at record levels, milder weather and ample amounts of gas in storage, the futures market has been sending bearish signals for weeks that futures prices for this winter (November-March) had likely already peaked in November. The contract was down more than 21% for November and hit a six-month low on Wednesday. "We will repeat a view that mild temperature trends will be contributing to a significant increase in the storage surplus back to as much as 330-340 bcf by month's end," analysts at energy advisory Ritterbusch and Associates said in a note. LSEG forecast U.S. gas demand in the Lower 48 states, including exports, at 125.2 bcfd this week and 125.4 bcfd next week, compared to last week's 121.4 bcfd. Next week's forecasts were higher than LSEG's outlook on Wednesday. LSEG said average gas output in the Lower 48 U.S. states has risen to 108.4 bcfd so far in December from a record 108.3 bcfd in November. Thomas Saal, senior vice president for energy at StoneX Financial, said "the market will remain sluggish if weather remains above normal over most of the country. If forecasts change and it gets colder, then prices will firm and maybe back up to $3." Some analysts have reduced their U.S. demand forecasts after Exxon Mobil delayed the start of first LNG production at its 2.3-billion-cubic-feet-per-day (bcfd) Golden Pass export plant under construction in Texas to the first half of 2025 from the second half of 2024. The U.S. is on track to become the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar. Much higher global prices have fed demand for U.S. exports due in part to supply disruptions and sanctions linked to the war in Ukraine. Gas was trading around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $15 at the Japan Korea Marker (JKM) in Asia. Week ended Week ended Year ago Five-year Dec 8 Dec 1 Dec 8 average Actual Actual Dec 8 U.S. weekly natgas storage change (bcf): -55 -117 -46 -81 U.S. total natgas in storage (bcf): 3,664 3,719 3,419 3,404 U.S. total storage versus 5-year average 7.6% 6.7% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 2.34 2.30 5.77 6.54 2.89 Title Transfer Facility (TTF) 11.29 11.22 36.68 40.50 7.49 Japan Korea Marker (JKM) 15.45 15.62 32.34 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 329.6 320 338 354 366 U.S. GFS CDDs 1.2 1 12 6 5 U.S. GFS TDDs 330.8 321 350 360 371 LSEG U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year (2018-2022) Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 108.1 108.8 108.8 102.8 94.2 U.S. Imports from Canada8 8.8 8.6 8.9 10.0 9.1 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2 Total U.S. Supply 116.9 117.5 117.7 112.8 103.5 U.S. Demand (bcfd) U.S. Exports to Canada 3.3 3.4 3.4 3.4 3.2 U.S. Exports to Mexico 3.9 3.8 4.8 5.2 5.0 U.S. LNG Exports 14.5 14.7 14.1 12.6 8.6 U.S. Commercial 13.2 13.9 13.7 15.4 14.6 U.S. Residential 20.9 22.3 21.9 25.8 24.7 U.S. Power Plant 33.2 34.3 34.7 30.4 28.6 U.S. Industrial 24.3 24.7 24.7 24.7 25.0 U.S. Plant Fuel 5.3 5.4 5.4 5.3 5.3 U.S. Pipe Distribution 2.7 2.8 2.7 2.7 2.9 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 99.8 103.4 103.2 104.4 101.2 Total U.S. Demand 121.4 125.2 125.4 125.6 118.0 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 82 83 107 81 Jan-Jul 81 82 77 102 79 Oct-Sep 82 83 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Dec 15 Dec 8 Dec 1 Nov 24 Nov 17 Wind 12 12 10 11 9 Solar 3 3 3 3 3 Hydro 6 5 6 6 6 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 40 40 42 39 42 Coal 17 17 17 16 17 Nuclear 20 21 20 22 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.33 2.37 Transco Z6 New York 2.04 2.10 PG&E Citygate 4.22 4.04 Eastern Gas (old Dominion South) 1.74 1.86 Chicago Citygate 2.02 2.16 Algonquin Citygate 3.20 4.00 SoCal Citygate 4.25 4.15 Waha Hub 1.85 2.00 AECO 1.66 1.22 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 35.50 38.25 PJM West 38.25 39.50 Ercot North 23.50 21.00 Mid C 62.13 59.08 Palo Verde 56.25 43.25 SP-15 54.50 49.00 (Reporting by Anjana Anil, Ashitha Shivaprasad and Daksh Grover in Bengaluru; Editing by Paul Simao)