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NEW YORK: US natural gas futures rose 5% on Tuesday, gaining some rare support from surging global oil and gas prices as the Russia-Ukraine conflict stokes energy supply concerns.

Over the past couple of months, the US gas market has focused more on domestic weather and supply and demand rather than what was happening in Europe, where gas prices soared 20% on Tuesday.

US gas prices have followed European futures only about 40% of the time so far in 2022, down from two-thirds of the time in the fourth quarter of 2021.

That lack of reaction to European gas markets came even though traders said higher overseas prices should keep demand for US liquefied natural gas (LNG) exports strong for months to come. But no matter how high global gas prices rise, the United States was already producing LNG at full capacity and could not make any more of the super-cooled fuel if it wanted to.

The United States, the world’s biggest gas producer, worked with other countries before the Russian invasion to ensure that gas supplies, mostly in the form of LNG, would keep flowing to Europe. Russia, the world’s second biggest gas producer, usually provides around 30% to 40% of Europe’s gas, which totaled about 16.3 billion cubic feet per day (bcfd) in 2021.

Front-month gas futures rose 22 cents, or 5.0%, to $4.622 per million British thermal units (mmBtu) at 12:47 p.m. EST (1747 GMT), putting the contract on track for its highest close since Feb. 23.

US oil prices, meanwhile, jumped over 10% on Tuesday on concerns over supply disruptions from Russia, which is also one of the world’s top oil producers.

Data provider Refinitiv said average gas output in the US Lower 48 states fell from a record 96.2 bcfd in December to 93.2 bcfd in January, 92.5 bcfd in February and a preliminary 92.2 bcfd so far in March, as cold weather froze oil and gas wells in several producing regions earlier in the year.

On a daily basis, however, gas production has climbed most days since dropping to 85.6 bcfd during a winter storm on Feb. 4.

With warmer weather coming, Refinitiv projected average US gas demand, including exports, would drop from 121.9 bcfd this week to 108.5 bcfd next week. Those forecasts were lower than Refinitiv’s outlook on Monday.

The amount of gas flowing to US LNG export plants slid from a record 12.44 bcfd in January to 12.43 bcfd in February and a preliminary 11.83 bcfd so far in March.

Traders said demand for US LNG would remain at or near record levels so long as global gas prices keep trading well above US futures as utilities around the world scramble for cargoes to meet surging demand in Asia and replenish low inventories in Europe, especially with the threat Russia could cut gas supplies to Europe.

Gas futures traded around $36 per mmBtu in Europe and $28 in Asia, compared with around $5 in the United States. But no matter how high global prices rise, the United States only has the capacity to turn about 12.5 bcfd of gas into LNG.

Global markets will have to wait until later this year when more of the 18 liquefaction trains under construction at Venture Global LNG’s Calcasieu Pass export plant in Louisiana start producing LNG. The first tanker carrying LNG from Calcasieu left early Tuesday.

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