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Updates with details on EIA data and analyst comments

Feb 22 (Reuters) - U.S. natural gas futures fell nearly 5% on Thursday as investors booked profits following a rally in the previous session spurred by Chesapeake Energy's decision to cut its planned output for 2024.

Front-month gas futures NGc1 fell 4.9% to $1.686 per million British thermal units by 11:27 am ET.

On Wednesday, prices posted their biggest one-day percentage gain since July 2022 after Chesapeake Energy CHK.O - soon to be the biggest U.S. gas producer after its merger with Southwestern Energy SWN.N - cut the amount it plans to produce in 2024 by roughly 30% in response to a plunge in gas prices to a 3-1/2-year low.

"After the rally, the market is bound to pull back as the reality hasn't changed, which is that the market is in an oversupply. We might see a pattern of consolidation here between technical support and bearish fundamentals for at least the next few weeks," said Robert DiDona of Energy Ventures Analysis.

"It is hard to argue for any type of market tightness here in the short term. If more producers don't quite grow production or spend CapEx or not make investments and we get some summer demand then prices could move above $2 mark, but market could see lower curves if we get a mild summer and see no more production cuts."

The U.S. Energy Information Administration (EIA) 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 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. EIA/GAS

Gas prices have fallen more than 30% so far this year because a mild winter kept heating demand low, allowing stockpiles to remain at well above normal levels, while output remained near record levels despite an Arctic freeze in January that briefly cut output and caused gas demand to soar to a record high.

Last week, U.S. energy firms Antero Resources AR.N and Comstock Resources CRK.N said they planned to reduce drilling this year, while EQT EQT.N, currently the nation's biggest gas producer, reduced its 2024 production guidance range.

For nearly a year, U.S. natural gas producers have cut production as prices fall, but relentless output gains, including from oil companies that pump gas as an oil byproduct, have unleashed record supplies.

U.S. liquefied natural gas (LNG) company Cheniere Energy LNG.N posted a 38.5% fall in its full-year LNG revenue on Thursday, hit by the fall in natgas prices.

U.S. Energy Secretary Jennifer Granholm said on Wednesday the government's pause on approvals of exports of LNG will not affect relationships with allies that import the fuel. Last month, President Joe Biden paused pending approvals of exports from new LNG projects, a move cheered by climate activists that could delay decisions on new plants.

"The U.S. LNG sector is projected to see substantial demand growth, from 13 Bcf/d in 2023 to nearly 25 Bcf/d by 2028, driven by projects already authorized. Key facilities like the Golden Pass and Plaquemines LNG are on track to start commissioning in 2024, promising increased demand," said Gelber & Associates in a note dated Wednesday.

"That said, the pause has led to delays in FIDs (Final Investment Decisions) for new projects in both the U.S. and Mexico and raised uncertainties about the U.S.'s role as an LNG exporter in the longer term," the note added.

Meanwhile, Tellurian, the developer of the Driftwood LNG project, has reached an agreement with an unnamed institutional investor to pledge its interest in the Driftwood project as collateral for the money it owes the investor, according to the company's latest SEC filing.

(Reporting by Ashitha Shivaprasad and Anjana Anil in Bengaluru; editing by Barbara Lewis, Kirsten Donovan)

((Ashitha.Shivaprasad@thomsonreuters.com;))

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