The United States Natural Gas Fund (NYSEArca: UNG) has increased 31.9% over the past three months and is up 50.7% year-to-date. Meanwhile, Nymex natural gas futures are now hovering around $4.07 per million British thermal units.

Natural gas has been in high demand for electricity generation as Americans ran air conditioners to fight off the summer heat, and forecasters anticipate rising exports and more weather demand to keep supplies down and prices elevated, the Wall Street Journal reports.

Natgas futures have surged 35% since April and are now trading at more than twice the price a year ago, hovering around their highest summer levels since 2014.

However, producers are not rushing to drill for more natural gas. After years of inundating the market with cheap natgas, big Appalachian producers that drive the U.S. market are maintaining relatively flat output, accumulating cash and keeping natural-gas prices high to generate better profits.

“People know how that plays out when you chase shorter-term price signals. You compare that versus the long-term value opportunity in getting our assets valued at a gas price that’s north of $3,” EQT Corp. CEO Toby Rice told the WSJ, adding that the company would wait to increase output until futures prices topped $3 for two or three years out.

Consequently, market observers are expecting lean inventories as the country heads into the hottest months of the summer season.

“We did not expect the move to $4 per million British thermal units so quickly,” JPMorgan Chase & Co. analysts said in a note. “The U.S. natural-gas market has found itself in an uncomfortable situation of potentially entering the winter withdrawal season with the lowest level in storage since 2018.”

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