Energy traders also noted that gas prices were gaining support from near-record gas flows to US liquefied natural gas (LNG) export plants and forecasts for colder weather and higher heating demand over the next two weeks than previously expected.
Front-month gas futures for February delivery on the New York Mercantile Exchange were up 31.4 cents, or 9.4%, to $3.668 per million British thermal units (mmBtu) at 9:20 a.m. EST (1420 GMT). On Friday, the contract dropped by about 8% to close at its lowest price since Dec. 17.
With big price swings in recent weeks, Monday’s gain was only the biggest daily percentage increase since prices jumped by 12.0% on Dec. 30.
Financial firm LSEG said average gas output in the Lower 48 US states has risen to 105.0 billion cubic feet per day (bcfd) so far in January, up from 103.8 bcfd in December. That compares with a record 105.3 bcfd in December 2023.
But since output hit a 10-month high of 106.0 bcfd on Dec. 30, supplies were on track to drop by around 3.4 bcfd to a preliminary six-week low of 102.6 bcfd on Monday due mostly to freezing wells and pipes, known in the energy industry as freeze-offs.
Those output declines from freeze-offs so far this winter were much smaller than in recent years. But with the coldest weather still to come, analysts have said that output declines from freeze-offs should grow in the coming days.
In past winters, freeze-offs slashed gas output by around 16.5 bcfd from Jan. 8-16 in 2024, 19.4 bcfd from Dec. 21-24 in 2022 and 20.4 bcfd from Feb. 8-17 in 2021, according to LSEG data.
Meteorologists projected weather in the Lower 48 states would remain mostly colder than normal through Jan. 21 with the coldest days expected later this week.
