NEW YORK: US natural gas futures retreated from a 30-month high on Tuesday as forecasts pointed to milder weather and lower demand over the next two weeks than previously expected.

Front-month gas futures for August delivery on the New York Mercantile Exchange fell 6.3 cents to settle 1.7% lower at $3.637 per million British thermal units (mmBtu) at 3:18 p.m. EDT. The session high of $3.822 was its highest since late 2018.

“Forecasts show a broader area of normal-to-below normal temperatures, especially in the gas consuming areas, weighing on the market,” said Thomas Saal, senior vice president of energy at StoneX. But “the hottest weather is ahead of us across the country with the southeast not far above normal temperatures, so we could see higher natural gas prices later in the summer,” he added.

The front-month also remained in overbought territory with a relative strength index (RSI) over 70 for a eighth day in a row, further adding pressure to prices.

Data provider Refinitiv said gas output in the Lower 48 US states fell to an average of 90.4 billion cubic feet per day (bcfd) so far in July due mostly to pipeline problems in West Virginia. That compares with an average of 92.2 bcfd in June and an all-time high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, would slip from 93.3 bcfd in the prior week to 89.3 bcfd this week as milder weather cuts air conditioning use, before rising to 93 bcfd in the following week.

The amount of gas flowing to US liquefied natural gas (LNG) export plants averaged 11 bcfd so far in July, up from 10.1 bcfd in June but still below the record 11.5 bcfd in April.

With European and Asian gas both trading over $12 per mmBtu, analysts said LNG exports from the United States would remain high. The Title Transfer Facility (TTF) in the Netherlands, the European gas benchmark, was near its highest since October 2008. US pipeline exports to Mexico averaged 6.3 bcfd so far in July, down from a record 6.7 bcfd in June.