Natural gas futures shot higher Tuesday, bouncing back from a recent selloff, as traders eyed additional storms brewing in the Atlantic Ocean.

Natural gas for October delivery settled up 7.9 cents, or 2.1%, at $3.909 a million British thermal units on the New York Mercantile Exchange.

Futures advanced Tuesday as signs emerged that Hurricane Irene is likely to be the first of many storms this hurricane season. Tropical Storm Katia, brewing in southern Atlantic, could turn into a hurricane in the coming days, according to the National Hurricane Center.

Market participants were also eyeing a tropical depression in the Gulf of Mexico, which could develop into a stronger storm this weekend that causes disruptions to the key Gulf production area, according to Pax Saunders, analyst at Gelber and Associates in Houston.

"This would be coming during a long holiday weekend, so it's very discouraging to the shorts," Saunders said.

Tuesday's rally comes a day after front-month futures fell to their lowest level since March, as widespread power outages from Hurricane Irene trimmed the outlook for gas-driven electricity demand.

However, some analysts said Monday's decline was overdone, prompting some market participants to snap up fresh contracts on the cheap.

"The people who have been selling this got ahead of themselves and bit off more than they could chew," said Peter Beutel, head of the trading advisory firm Cameron Hanover.

Although parts of the southern U.S. continued to be hit with high temperatures and above-normal heat is forecast for parts of the Midwest this week, market participants have already begun to look past the peak summer cooling season and focus on the prospect of weakening demand this fall.

Unusually warm temperatures this summer kept a floor under natural gas prices, sending front-month futures as high as nearly $5 per million British thermal units in June. Prices have dropped sharply in recent weeks, however, as expectations of cooler temperatures ahead and signs of a weakening U.S. economic recovery weigh on the outlook for industrial demand.

Meanwhile, the U.S. gas market remains well supplied, a fact that is likely to act as a buffer against any storm-related disruptions in the coming weeks. On Tuesday, the U.S. government said natural-gas output in the lower 48 states hit a record for the shale-gas era in June.

Gross natural-gas production rose by 0.1% in June to 69.47 billion cubic feet a day, the Energy Information Administration said in a closely watched monthly report. The May production figure was revised higher, to 69.39 Bcf a day, from 69.22 Bcf a day.