Natural gas prices closed higher on Tuesday, recovering from Monday’s 25% drop. Mixed US weather forecasts boosted prices, with above-normal temperatures expected in the Midwest and South, but colder temperatures in the mid-Atlantic and Northeast. US dry gas production is up 5.1% y/y, while demand is up 26.7% y/y.

Last week, natural gas prices hit a 3-year high due to a massive storm and cold weather. Freeze-ups in gas wells and disrupted production led to a 15% decrease in total US natural gas production. Lower US nat-gas production forecasts support prices as the EIA predicts a decrease in 2026 production.

The EIA report from last Thursday showed a larger drawdown in nat-gas inventories than expected, signaling ample supplies. US electricity output fell by 6.3% y/y, while gas storage in Europe is 41% full. Baker Hughes reported an increase in active US nat-gas drilling rigs, nearing a 2.25-year high.

Nat-gas prices surged due to cold weather disruptions in production, causing a decrease in total US production. Forecasts for lower US nat-gas production support prices. Last week’s EIA report showed larger than expected drawdown in inventories, signaling ample supplies. US electricity output fell, while Europe’s gas storage is at 41% full.

Read more at Yahoo Finance: Nat-Gas Prices Move Higher on a Mixed US Weather Forecast