Supported by a day/day drop in production following new all-time highs to open the week, natural gas futures were trading several cents higher early Tuesday. At around 8:30 a.m. ET, the September Nymex contract was up 3.6 cents to $2.106/MMBtu.

Genscape Inc.’s daily pipe estimate of Lower 48 dry gas production was revised higher to a new all-time high for Monday, but Tuesday’s preliminary estimate was showing a drop of more than 2.4 Bcf/d.

“Revisions to yesterday’s nominations increased our estimate to 91.69 Bcf/d,” senior natural gas analyst Rick Margolin said in a note to clients early Tuesday. “The current estimate for today’s production based on evening cycle nominations is showing Lower 48 output down to 89.26 Bcf/d. There is 1 Bcf/d of declines in the East; 0.72 Bcf/d of declines in Texas; 0.42 Bcf/d of lower output from the Permian; and the Gulf, Midcon and San Juan are all posting 0.1-0.2 Bcf/d drops each.”

Each sub-region in the East was showing lower output early Tuesday, with the largest drop coming from Northeast Pennsylvania, according to Margolin. He attributed the lower supply to maintenance on the Equitrans, Rockies Express, Columbia Gas and Tennessee Gas pipelines.

Meanwhile, the overnight forecasts going into Tuesday’s trading were “little changed” over the next 10 days but slightly hotter for Aug. 19-21, enough to add some cooling degree days back to the outlook, according to NatGasWeather.

“The data isn’t hot enough over enough of the country through Aug. 19, then close to hot enough after as high pressure strengthens over the Midwest and East,” NatGasWeather said. “Although, to our view, any late August heat would need to last if it’s to get any meaningful rise out of the market, something that could be quite difficult to do since this summer has proven it takes much above normal” cooling demand to drive smaller-than-normal weekly inventory builds.

“It’s difficult to know what prices do here after setting fresh multi-year lows,” and “getting within striking distance” of the $2.00 mark Monday before rebounding in early Tuesday’s trading, the forecaster said. This suggests “taking out $2 could be difficult” for the bears.

The natural gas markets are coming off a “bleak” day of trading Monday, observed analysts at EBW Analytics Group. This was driven primarily by surging production and a drop in feed gas demand, notably from Cheniere Energy Inc.’s Sabine Pass liquefied natural gas (LNG) terminal.

“From a technical standpoint, after closing the day back above $2.04, the September contract is poised for a modest rebound, possibly testing resistance at $2.13 or even $2.18,” the EBW analysts said. “With the potential for Sabine Pass 3 and 4 to be down for two to three weeks, though, a further test of support near $2.00 remains likely later this month.

“…The market has proven particularly sensitive to LNG feed gas flows throughout the injection season as it attempts to sniff out hints of potential economic shut-ins due to weak global demand. Recent weakness at Sabine Pass, however, comes as Cheniere conducts maintenance at Trains 3 and 4…Demand is likely to rebound when maintenance ends later this month, but LNG shut-in risks this fall remain a clear bearish catalyst for natural gas.”

September crude oil futures were trading 25 cents higher at $54.94/bbl shortly after 8:30 a.m. ET, while September RBOB gasoline was up fractionally to $1.7270/gal.