Adds latest prices in paragraphs 2, 4

By Scott DiSavino

NEW YORK, Jan 6 (Reuters) - U.S. natural gas futures fell about 5% to a 10-week low on Tuesday on forecasts for milder weather and lower heating demand over the next two weeks than previously expected.

Front-month gas futures for February delivery NGc1 on the New York Mercantile Exchange fell 17.3 cents, or 4.9%, to settle at $3.350 per million British thermal units, their lowest close since October 28.

That put the front month down for a fifth day in a row for the first time since June and pushed it into technically oversold territory for the first time in two weeks.

The decline in futures also helped reduce the stock prices of the two biggest U.S. gas producers, Expand Energy EXE.O and EQT EQT.N, by over 1% to their lowest levels since October.

In the cash market, meanwhile, average prices at the Waha Hub in the Permian Shale in West Texas fell into negative territory for the first time this year as pipeline constraints trapped gas in the nation's biggest oil-producing basin.

That compares with an average of $1.15 per mmBtu in 2025 and $2.88 during the past five years (2021-2025).

Waha first averaged below zero in 2019. It did so 17 times in 2019, six times in 2020, once in 2023, a record 49 times in 2024, and 39 times in 2025.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 states fell to 109.1 billion cubic feet per day (bcfd) so far in January, down from a monthly record high of 109.7 bcfd in December.

On a daily basis, output was on track to drop to a three-week low of around 108.0 bcfd on Tuesday due in part to declines in Louisiana and Texas, down from 109.3 bcfd on Monday and a daily record high of 111.2 bcfd on December 21, according to LSEG data.

Meteorologists forecast weather across the country would remain mostly warmer than normal through January 21, keeping the amount of gas needed to heat homes and businesses lower than usual for this time of year.

LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 130.8 bcfd this week to 132.3 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday.

Average gas flows to the eight large U.S. LNG export plants rose to 18.7 bcfd so far in January, up from a monthly record high of 18.4 bcfd in December.

The U.S. became the world's biggest LNG exporter in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports, due in part to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.

Gas was trading around $10 per mmBtu at both the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and the Japan-Korea Marker (JKM) JKMc1 benchmark in Asia. NG/EU

Global prices have declined to multi-month lows over the past month or so on hopes peace talks over Ukraine could result in the lifting of sanctions against Moscow. That could allow Russia, the world's second-biggest gas producer behind the U.S., to export more fuel in the future.

(Reporting by Scott DiSavino; Editing by Kirsten Donovan, Rod Nickel)

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