Adds latest prices

By Scott DiSavino

March 4 (Reuters) - U.S. natural gas futures jumped about 9% to a 26-month high on Tuesday on record flows to liquefied natural gas export plants and forecasts for higher demand next week than previously expected.

Traders said prices also gained support on worries gas exports from Canada to the U.S. could decline due to U.S. President Donald Trump's tariffs on Canada and Mexico that took effect on Tuesday.

Front-month gas futures NGc1 for April delivery on the New York Mercantile Exchange rose 22.8 cents, or 5.5%, to settle at $4.350 per million British thermal units (mmBtu), their highest close since December 2022.

Prices rose despite near-record output and forecasts for mild weather through mid-March, which should allow utilities to pull less gas out of storage in coming weeks.

Extreme cold weather earlier this year, however, has already forced energy firms to pull massive amounts of gas out of storage, including record amounts in January, cutting stockpiles to around 12% below the five-year (2020-2024) normal. EIA/GAS NGAS/POLL

Looking forward, the premium of futures for March over April 2026 NGH26-J26 rose to a 15-month high on Tuesday. Some analysts said it signals the market is betting energy firms will have a tough time rebuilding stockpiles to normal levels by the winter of 2025-2026, which could cause prices to spike during the winter months if the weather turns extremely cold.

March is the last month of the winter storage withdrawal season and April is the first month of the summer storage injection season. Since gas is primarily a winter heating fuel, traders have said summer should not trade above winter because demand for the fuel is generally higher during winter months.

The industry calls the March-April spread the "widow maker" because rapid price moves on changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006.

SUPPLY AND DEMAND

Average gas output in the Lower 48 U.S. states rose to 105.6 billion cubic feet per day (bcfd) so far in March, up from a record 104.7 bcfd in February, according to LSEG data.

On a daily basis, output was on track to decline by 1.8 bcfd over the past four days to a preliminary 104.7 bcfd on Tuesday, down from a three-week high of 106.5 bcfd on February 28. That compares with an all-time daily high of 106.7 on February 6.

In the import market, the U.S. was on track to pull in around 8.3 bcfd of gas from Canada on Tuesday, down from an average of 9.6 bcfd over the prior seven days. That compares with 8.6 bcfd in 2024 and an average of 7.6 bcfd over the prior five years (2019-2023).

Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through March 19.

With milder weather coming, LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 118.8 bcfd this week to 115.2 bcfd next week. The forecast for this week was lower than LSEG's outlook on Monday, while its forecast for next week was higher.

The amount of gas flowing to the eight big U.S. LNG export plants held at an average of 15.6 bcfd so far in March, the same as February's record high, as new units at Venture Global's VG.N 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana enter service.

On a daily basis, LNG feedgas was on track to fall to a preliminary three-week low of 15.2 bcfd on Tuesday on small declines at several export plants. That compares with an all-time daily high of 16.4 bcfd on February 23.

(Reporting by Scott DiSavino; Editing by Paul Simao, Bill Berkrot and Richard Chang)

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

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

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

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

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

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

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

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

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

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NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

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