UPDATE 1-US natgas spirals lower on weak demand and plentiful supplies

(Adds comments in paragraph 6, updates latest price) Feb 23 (Reuters) - U.S. natural gas futures shed more than 7% on Friday on record output, sufficient fuel in storage and lower heating demand. Front-month gas futures were down 7.5% or 12.9 cents to settle at $1.603 per million British thermal units. "The natgas market is simply in excess supply, and there is a lack of seasonal winter demand," said Thomas Saal, senior vice president for energy at StoneX Financial. "Prices can always fall further than you think, but it should only last a month or so. Once we are into summer and injection season starts, prices might recover." On Wednesday gas prices soared about 13% after Chesapeake Energy, soon to be the biggest U.S. gas producer after its merger with Southwestern Energy, cut planned production for 2024 by roughly 30% after a plunge in prices to a 3-1/2 year low. "While gas producers are hurting, to what degree the intended production cut or curtailing would impact gas prices remains to be seen as oil companies are still enjoying a decent level of oil prices and producing associated gas in the meantime," said Zhen Zhu, managing consultant at C.H. Guernsey and Company in Oklahoma City. Prices have slid more than 35% so far this year, pressured by a mild winter that has left stockpiles well above normal, while output remained near record levels despite an Arctic freeze in January that briefly cut output and sent gas demand to a record high. The U.S. Energy Information Administration (EIA) on Thursday said utilities pulled a smaller-than-expected 60 billion cubic feet (bcf) of gas out of storage during the week ended Feb. 16. That was lower than the 65-bcf withdrawal analysts had forecast in a Reuters poll, and compared with a withdrawal of 75 bcf during the same week a year ago and a five-year (2019-2023) average decrease of 168 bcf for this time of year. The smaller than expected withdrawal "stretched the surplus against the averages out to 450 bcf, with additional expansion of another 100 bcf or more now possible next month," analysts at energy advisory Ritterbusch and Associates said in a note. Financial company LSEG said gas output in the U.S. Lower 48 states has risen to an average of 105.5 billion cubic feet per day (bcfd) so far in February from 102.1 bcfd in January, still shy of the monthly record of 106.3 bcfd in December. U.S. energy regulators said on Thursday they would decide quickly on Venture Global LNG's request for a one-year extension to its construction permit for its Calcasieu Pass LNG plant in Louisiana. The announcement came on the same day that Italian electric firm Edison SPA and Portugal's Galp Energia joined three other Venture Global LNG customers in asking to be allowed to challenge the extension request. The European benchmark gas price was also down for the day, hitting its lowest level in almost three years on high storage levels and low demand. Elsewhere nearly a third of Shell's profit in the fourth quarter of 2023 came from the $2.4 billion it made in trading LNG as it captured strong demand ahead of winter, three sources close to the company told Reuters. Week ended Week ended Year ago Five-year Feb 23 Feb 16 Feb 23 average Forecast Actual Feb 23 U.S. weekly natgas storage change (bcf): -97 -60 -79 -143 U.S. total natgas in storage (bcf): 2,373 2,470 2,126 1,876 U.S. total storage versus 5-year average 26.5% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2023 (2018-2022) Henry Hub 1.62 1.73 2.44 2.66 3.60 Title Transfer Facility (TTF) 7.25 7.52 16.52 13.04 14.39 Japan Korea Marker (JKM) 8.16 8.29 16.87 14.39 14.31 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 267 265 346 U.S. GFS CDDs 8 6 8 U.S. GFS TDDs 275 271 354 LSEG U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year (2019-2023) Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 105.9 104.6 104.7 101.3 92.4 U.S. Imports from Canada 8.8 8.9 8.9 8.7 9.1 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2 Total U.S. Supply 114.7 113.5 113.7 110.0 101.7 U.S. Demand (bcfd) U.S. Exports to Canada 3.5 3.6 3.5 2.6 2.7 U.S. Exports to Mexico 6.5 6.4 6.4 5.8 5.2 U.S. LNG Exports 13.9 12.6 13.8 12.8 8.4 U.S. Commercial 13.7 14.4 11.8 14.1 16.3 U.S. Residential 22.1 19.3 18.3 22.6 27.6 U.S. Power Plant 32.3 32.5 32.2 30.3 29.3 U.S. Industrial 24.5 24.1 23.7 24.1 25.4 U.S. Plant Fuel 5.2 5.2 5.2 5.2 5.3 U.S. Pipe Distribution 2.7 2.6 2.5 2.7 2.7 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 100.7 96.2 93.8 99.1 106.7 Total U.S. Demand 124.6 120.6 117.6 120.3 123.0 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 81 79 83 107 81 Jan-Jul 83 81 77 102 79 Oct-Sep 82 81 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Feb 23 Feb 16 Feb 9 Feb 2 Jan 26 Wind 12 11 14 9 7 Solar 4 4 3 3 2 Hydro 7 7 7 7 6 Other 1 1 1 2 2 Petroleum 0 0 0 0 0 Natural Gas 41 41 38 40 43 Coal 15 16 16 18 22 Nuclear 20 21 21 20 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 1.62 1.58 Transco Z6 New York 1.35 1.44 PG&E Citygate 2.71 2.92 Eastern Gas (old Dominion South) 1.21 1.23 Chicago Citygate 1.45 1.54 Algonquin Citygate 2.10 2.07 SoCal Citygate 2.83 2.65 Waha Hub 0.84 0.95 AECO 1.63 1.69 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 29.50 33.00 PJM West 23.25 26.50 Ercot North 21.50 14.75 Mid C 45.27 46.15 Palo Verde 25.10 30.50 SP-15 28.00 26.25 (Reporting by Ashitha Shivaprasad and Rahul Paswan in Bengaluru; Editing by Jan Harvey and David Gregorio)