U.S. natural gas futures edged up about 3% on Tuesday as short sellers took some profits after the contract dropped about 16% during the prior three sessions and as higher global prices keep demand for U.S. liquefied natural gas (LNG) exports strong.

That price increase came despite rising output and forecasts for milder weather and lower heating demand next week than previously expected.

In October, global gas prices soared to record highs as utilities scramble for LNG cargoes to refill low stockpiles in Europe and meet rising demand in Asia, where energy shortfalls have caused power blackouts in China. U.S. futures also climbed, reaching a 12-year high in early October, on expectations LNG demand will remain strong for many months.

Price gains in the United States, however, were restrained compared with overseas markets because the United States has more than enough gas in storage for winter and ample production to meet domestic and export demand. Prices in Europe and Asia were about five times higher than in the United States.

U.S. NatGas Supply to Be Adequate

Analysts expect U.S. gas inventories will top 3.6 trillion cubic feet (tcf) by the start of the winter heating season in November, which they said would be a comfortable level even though it falls shy of the five-year average of 3.7 tcf. U.S. stockpiles were currently about 3% below the five-year average for this time of year. In Europe, analysts said stockpiles were about 15% below normal.