CHICAGO: US natural gas futures held near a three-month high on Tuesday on forecasts for warmer weather over the next two weeks than previously expected. That warmth was expected to prompt power generators to burn more gas to produce electricity to meet rising air conditioning use.

Traders, however, noted that declines in exports and a small increase in output were keeping prices in check.

Front-month gas futures were unchanged at $3.105 per million British thermal units at 7:50 a.m. EDT (1150 GMT). On Monday, the contract closed at its highest since Feb. 17.

Data provider Refinitiv said gas output in the Lower 48 US states averaged 90.9 billion cubic feet per day (bcfd) so far in May, up from 90.6 bcfd in April, but still well below November 2019’s monthly record of 95.4 bcfd.

With the weather warming, Refinitiv projected average gas demands, including exports, would rise from 80.9 bcfd this week to 85.2 bcfd next week.