NEW YORK: U.S. natural gas futures rose about 3% on Tuesday on a drop in daily output to a preliminary four-month low and forecasts confirming hotter weather in late June, which should increase demand for gas to produce power for air conditioning.

The price increase came even though the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants dropped to a five-month low due to maintenance, which helped cut forecasts for overall U.S. gas demand this week and next.

Front-month gas futures for July delivery on the New York Mercantile Exchange rose 7.7 cents, or 3.4%, to $2.343 per million British thermal units (mmBtu) at 8:06 a.m. EDT (1206 GMT).

Mostly mild weather in recent weeks has kept heating and cooling demand low, limiting price changes. The lack of price movement cut historic or actual 30-day close-to-close volatility to just 61.3%, its lowest since April 2022 for the second day in a row.

On a daily basis, historic volatility hit a record high of 177.7% in February 2022 and a record low of 7.3% in June 1991.

So far this year, historic volatility has averaged 88.9%. That compares with an annual record high of 92.8% in 2022 and a five-year (2018-2022) average of 57.9%.

Data provider Refinitiv said average gas output in the U.S. lower 48 states slid to 102.1 billion cubic feet per day (bcfd) so far in June, down from a monthly record of 102.5 bcfd in May.

But, on a daily basis, output was on track to plunge 2.6 bcfd to a preliminary low of 98.8 bcfd on Tuesday, its lowest since February. That would be the biggest daily decline in output since December 2022. Analysts, however, noted preliminary data is often revised later in the day.

Meteorologists said the weather in the lower 48 states would remain mostly near normal through June 20 before turning hotter than normal from June 21-28.

With warmer weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 92.7 bcfd this week to 96.7 bcfd next week. Those forecasts, however, were lower than Refinitiv’s outlook on Monday.

Gas flows to the seven big U.S. LNG export plants fell to an average of 11.8 bcfd so far in June, down from 13.0 bcfd in May. That is well below the monthly record of 14 bcfd in April due to maintenance at several facilities, including Cheniere Energy Inc’s Sabine Pass in Louisiana.

On a daily basis, the amount of gas flowing to LNG plants was on track to drop from 11.5 bcfd on Monday to a preliminary 11.3 bcfd on Tuesday, the lowest since December 2022.

The record flows in April were higher than the 13.8 bcfd of gas the seven big plants can turn into LNG since the facilities also use some of the fuel to power equipment used to produce LNG.