Weaker production numbers day/day and continued sweltering heat in updated forecasts helped natural gas futures extend their recent gains in early trading Tuesday. Coming off a 39.2-cent rally in the previous session, the August Nymex contract was up another 20.3 cents to $6.629/MMBtu at around 8:50 a.m. ET.

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Lower 48 production estimates as of early Tuesday were showing a roughly 2.8 Bcf/d decline day/day, down to around 93 Bcf/d on lower supply flowing out of the Northeast and the New Mexico portion of the Permian Basin, Wood Mackenzie told clients.

In the Northeast, declines totaling roughly 1.3 Bcf/d were spread across Ohio, northeastern Pennsylvania and southwestern Pennsylvania, Wood Mackenzie analyst Laura Munder said. Permian New Mexico output, meanwhile, was off around 1 Bcf/d.

Munder attributed the declines to various pipeline maintenance or operational events in these regions, “with revisions expected in tomorrow’s data sample.”

Weather trends were mixed overnight but continued to advertise “impressively hot” conditions over the Lower 48, particularly between days eight and 15 of the outlook period, according to NatGasWeather.

From next Monday through July 25, a “dangerous heat dome rules most of the U.S. with highs of 90s and 100s besides the far northern U.S. for strong to very strong demand,” the firm said. “While the overnight data failed to lose any demand, we have concerns the eight- to 15-day period is now too hot and could give back demand in time” as those days roll forward in the forecast.

Hotter temperatures for July and August will serve to offset demand destruction from the extended outage at the Freeport liquefied natural gas terminal, NatGasWeather noted. 

The rallying prices to start the week also follow last week’s bullish storage miss from the Energy Information Administration, which “suggested the supply/demand balance wasn’t as loose as the natural gas markets had been led to believe,” the firm added.

Technically speaking, natural gas prices cleared a key hurdle with Monday’s rally, but more work remains for bulls to keep the upward momentum going, according to ICAP Technical Analysis.

“Bulls were able to punch through the .236 retracement,” ICAP analyst Brian LaRose told clients ahead of Tuesday’s session. “Problem is, they immediately ran into a wall at the 22-day moving averages. Need these moving averages, along with the .382 retracement at $6.982 exceeded to keep plotting a course north from here.

“Should natural gas roll over instead, the bears would get another shot at the 200-day and 50-week moving averages,” LaRose added.