Recovering liquefied natural gas (LNG) demand, forecasts for a colder winter that were supported by an early Midwest chill, low production and abating storage containment worries should support gas prices in the final months of this year and establish momentum for 2021, analysts argue.

“While U.S. storage is projected to exceed 4 Tcf by the end” of injection season, “declining gas production and rebounding demand could leave the market short in 2021,” said Connor McLean, an energy analyst at BTU Analytics. “Depending on how heating demand and LNG exports materialize,” supplies “could be severely diminished by the end of the winter, leading to an upside for Henry Hub pricing.”

The November Nymex futures contract surged past the $3 level on Tuesday, boosted by...