Natural gas futures pared their losses in early trading Tuesday as production estimates pointed to a sizable day/day drop in supply, though analysts continued to see downside on moderating summer temperatures. 

NGI Morning Natural Gas Price & Markets Coverage

Coming off a 47.5-cent decline in the previous session, the September Nymex contract was up 14.2 cents to $7.731/MMBtu at around 8:50 a.m. ET.

Estimates from Wood Mackenzie as of early Tuesday showed a roughly 2.0 Bcf/d day/day drop in domestic production, with total output down to around 96 Bcf/d.

Declines included a drop of around 850 MMcf/d in production flowing out of Texas and a roughly 590 MMcf/d drop in Northeast supply, Wood Mackenzie analyst Laura Munder told clients. Production drops were also observed for the Permian New Mexico (down around 150 MMcf/d) and...