NEWYORK: U.S. natural gas futures edged up about 2% on Wednesday on a decline in daily gas output after higher prices in May pushed some producers to return to the well pad in recent weeks.

That price increase occurred despite the tremendous oversupply of gas still in U.S. storage. Analysts forecast gas stockpiles were about 25% above normal for this time of year.

Front-month gas futures for July delivery on the New York Mercantile Exchange were up 6 cents, or 2.3%, to $2.646 per million British thermal units (mmBtu) at 9:26 a.m. EDT (1326 GMT).

Gas output in the Lower 48 U.S. states has averaged 98.1 billion cubic feet per day (bcfd) so far in June, the same as in May, according to data from financial firm LSEG. That compares with a monthly record of 105.5 bcfd in December 2023.

On a daily basis, however, output was on track to drop by about 2.1 bcfd over the past two days to a preliminary five-week low of 96.7 bcfd on Wednesday. That output, however, was up about 0.2 bcfd from a 15-week low of 96.5 bcfd on May 1.

Analysts said the increase since May 1 was a sign output was rising due to a 47% jump in futures prices in April and May. Output hit a six-week high of 99.5 bcfd on May 24.

Overall, U.S. gas production is still down around 9% so far in 2024 after several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut drilling activities when prices fell to 3-1/2-year lows in February and March.

EQT is the biggest U.S. gas producer and Chesapeake is on track to become the biggest producer after its merger with Southwestern Energy.

Meteorologists projected weather across the Lower 48 states would remain warmer than normal through June 20 except for some near-normal days in the June 9-11 period.