August Nymex natural gas prices closed up +3.11% on Tuesday due to forecasts of hotter US weather. Nat-gas prices had fallen to a 3-month low on Monday from temperate weather forecasts and increased US production. Lower-48 state dry gas production and demand were up y/y, with estimated LNG net flows to US export terminals also rising.

US electricity output increased, boosting nat-gas demand from utility providers. Last week’s EIA report was bullish for nat-gas prices, showing inventories below consensus and the 5-year average. Gas storage in Europe was 66% full, lower than the 5-year average of 74%. Baker Hughes reported an increase in active US nat-gas drilling rigs to a 2-year high.

Nat-gas prices surged on Tuesday as weather forecasts predicted above-normal temperatures in the US, increasing air-conditioning usage. Despite a recent drop in prices due to US production and weather forecasts, increased demand from electricity providers may support prices. The EIA report showed lower inventories, signaling adequate supply levels.

Read more at Yahoo Finance: Hot US Weather Forecasts Push Nat-Gas Prices Higher