Coming off a furious rally in the previous session, natural gas futures pared their gains early Thursday as traders awaited the latest round of government inventory data for more insights into how sweltering temperatures have impacted balances. 

After rocketing 74.3 cents higher in Wednesday’s session, the August Nymex contract was off 21.4 cents to $7.793/MMBtu as of around 8:50 a.m. ET.

Wednesday’s sharp rally saw prices break through a key technical level amid bullish pressure from scorching summer heat, according to EBW Analytics Group senior analyst Eli Rubin.

“The August contract spiked to $8.040 yesterday as one of the hottest recorded days in the country pushed prices past the 50-day moving average at $7.52 — inducing short-covering after crossing the...