UPDATE 1-U.S. natgas slips 2% to 25-month low on milder Feb weather forecast

(Adds latest prices) Feb 3 (Reuters) - U.S. natural gas futures slid about 2% to a 25-month low on Friday on forecasts for milder winter weather than expected over the next two weeks, and lower heating demand. The gas contract was down more than 63% over the past seven weeks, its biggest seven-week collapse in history. January temperatures in the U.S. Lower 48 states averaged about 41.8 degrees Fahrenheit (5.7 Celsius), second warmest on record for the month. The warmest January on record was in 2006 when the temperature averaged 42.8 F, according to data from Refinitiv and the federal government. In an outlook that has further depressed gas prices, meteorologists forecast the current extreme cold freezing parts of the country would end on Feb. 4 and average temperatures will climb back to mostly above-normal levels from Feb. 5 through at least Feb. 18. Prices fell even though cold weather cut output by freezing oil and gas wells and expectations mounted that the Freeport liquefied natural gas (LNG) export plant in Texas could start pulling in big amounts of fuel as it restarts LNG production in coming weeks. Federal regulators this week approved Freeport's plan to start sending gas to one of the plant's three liquefaction trains, which turn gas into LNG. On Thursday, Freeport asked regulators for permission to start loading LNG on ships to free up space in the storage tanks for the new LNG expected to be produced soon. Analysts, however, have said they still do not expect Freeport to return to full LNG production until mid-March or later. Freeport, the second-biggest U.S. LNG export plant, shut after a fire in June 2022. The energy market expects gas prices to rise once the plant starts producing LNG again. When operating at full power, Freeport can turn about 2.1 billion cubic feet (bcf) of gas into LNG each day. That is about 2% of total U.S. daily gas production. Federal regulators will hold a public meeting on Freeport on Feb. 11 to provide members of the community and other interested parties an opportunity to voice their concerns about Freeport's restart plans and get an update on what's happening at the plant. Over the past week, U.S. gas output has dropped about 3.9 billion cubic feet per day (bcfd) to a one-month low of 93.6 bcfd as winter storms freeze oil and gas wells - known as freeze-offs - in several states, including Texas, Oklahoma, New Mexico and Pennsylvania. Front-month gas futures for March delivery fell 4.6 cents, or 1.9%, to settle at $2.410 per million British thermal units (mmBtu), their lowest close since December 2020. That put the contract down about 22.5% this week, its biggest weekly decline since plunging 23.0% in December. With extreme cold blanketing the U.S. Northeast, next-day power prices for Friday in New England soared 140% to around $237 per megawatt hour (MWh), their highest since late December. Spot gas prices in New England soared 437% to $26 per mmBtu, also their highest since late December. At those prices, it makes sense for some New England power generators to burn oil instead of gas. The region was currently getting about 11% of its generation from oil and 24% from gas. On average, about 50% of the power generated in New England comes from gas with less than 1% from oil. But on the coldest days, oil-fired generators can produce over 20% of the grid's power. That's because most of the pipeline gas going to New England is used to heat homes and businesses on those cold days, forcing generators to rely on more expensive oil and LNG. Week ended Week ended Year ago Five-year Feb 3 Jan 27 Feb 3 average (Forecast) (Actual) Feb 3 U.S. weekly natgas storage change (bcf): -185 -151 -228 -171 U.S. total natgas in storage (bcf): 2,398 2,583 2,133 2,249 U.S. total storage versus 5-year average 6.6% +6.7% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2018-2022) Henry Hub 2.49 2.46 4.46 6.54 3.60 Title Transfer Facility (TTF) 18.81 18.11 26.94 40.50 14.39 Japan Korea Marker (JKM) 18.37 18.97 25.82 34.11 14.31 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 385 388 452 420 413 U.S. GFS CDDs 4 5 3 5 4 U.S. GFS TDDs 389 393 455 425 417 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 98.5 96.0 94.9 91.7 87.7 U.S. Imports from Canada 8.3 8.4 8.4 10.2 9.1 U.S. LNG Imports 0.0 0.0 0.0 0.2 0.2 Total U.S. Supply 106.8 104.3 103.3 102.1 97.0 U.S. Demand (bcfd) U.S. Exports to Canada 2.6 2.2 2.2 2.2 2.7 U.S. Exports to Mexico 5.3 5.1 5.3 6.0 5.2 U.S. LNG Exports 12.5 12.6 12.4 12.3 6.6 U.S. Commercial 16.5 18.3 16.2 19.4 16.4 U.S. Residential 27.9 31.4 27.0 33.3 27.7 U.S. Power Plant 32.3 33.6 31.0 29.6 28.1 U.S. Industrial 25.7 26.1 24.8 26.0 25.2 U.S. Plant Fuel 4.9 4.7 4.7 4.9 4.8 U.S. Pipe Distribution 2.9 3.1 2.8 2.9 3.1 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 110.4 117.4 106.8 116.2 105.4 Total U.S. Demand 130.8 137.3 126.7 136.7 119.9 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Feb 3 Jan 27 Jan 20 Jan 13 Jan 6 Wind 10 11 13 11 12 Solar 2 2 2 2 2 Hydro 7 7 7 7 7 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 39 38 36 38 36 Coal 21 19 18 19 18 Nuclear 20 21 21 21 23 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.67 2.65 Transco Z6 New York 22.19 4.13 PG&E Citygate 5.35 17.41 Eastern Gas (old Dominion South) 2.64 2.50 Chicago Citygate 2.85 2.67 Algonquin Citygate 26.06 12.75 SoCal Citygate 6.00 15.86 Waha Hub 2.24 2.52 AECO 2.24 2.22 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 237.25 99.00 PJM West 145.25 40.50 Ercot North 29.75 42.00 Mid C 52.43 152.50 Palo Verde 65.00 89.00 SP-5 66.00 145.50 (Reporting by Scott DiSavino; Editing by David Gregorio)