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US natural gas futures gained about 2% on Tuesday, putting the contract on track for its highest close in 13 years for a second day in a row, with a sharp drop in US output and on expectations freezing weather in Alberta, Canada will move into the United States next week and boost heating demand.

Traders noted US gas prices were also being pulled higher on Tuesday by a 4% jump in global crude and other energy futures.

US gas futures have already soared about 82% so far this year with much higher prices in Europe keeping demand for US liquefied natural gas (LNG) near record highs as several countries try to wean themselves off Russian gas after Russia invaded Ukraine on Feb. 24.

Front-month gas futures rose 14.2 cents, or 2.1%, to $6.785 per million British thermal units (mmBtu) at 8:16 a.m. EDT (1216 GMT), putting the contract on track to hit its highest close since November 2008 for a second day in a row.

US consumer prices increase most in 16-1/2 years in March

Traders noted one of the more surprising observations about the recent US price run-up is that while US gas prices have soared about 44% over the past month, European gas, currently trading around $33 per mmBtu, fell about 23% as Russia keeps sending supplies to Europe via pipeline and LNG vessels keep delivering cargoes.

Analysts said in addition to high LNG demand, US prices were rising on domestic concerns, including growing worries that cooler weather in April will keep heating demand high enough to prevent utilities from injecting much gas into storage. US gas stockpiles were currently around 17% below the five-year (2017-2021)

In the spot market, gas prices for Tuesday at the AECO hub in Alberta rose to their highest since March 2014 as homes and businesses crank up their heaters to escape a spring freeze.

AccuWeather forecast high temperatures in Calgary, the biggest city in the province, would remain below freezing for much of this week. That compares with a normal high of around 51 degrees Fahrenheit (10.6 Celsius) in the city at this time of year.

Traders noted that Alberta’s cold, expected to reach the United States next week, would reduce gas exports from Canada. Already, prices in Chicago, which gets some gas from Alberta, rose to their highest since the February freeze in 2021.

Data provider Refinitiv said average gas output in the US Lower 48 states rose to 94.6 billion cubic feet per day (bcfd) so far in April from 93.7 bcfd in March. That compares with a monthly record of 96.3 bcfd in December.

On a daily basis, however, preliminary data showed output was on track to drop 1.9 bcfd to 93.4 bcfd on Tuesday due mostly to declines in Appalachia. That would be the biggest daily decline since freezing weather shut wells in early February, but preliminary data is often revised.

The amount of gas flowing to US LNG export plants slid from a record 12.9 bcfd in March to 12.3 bcfd so far in April due mostly to declines at Freeport LNG’s facility in Texas and Cheniere Energy Inc’s Sabine Pass in Louisiana. The United States can turn about 13.2 bcfd of gas into LNG.

The amount of feedgas flowing to Sabine Pass on Tuesday was on track to fall to a preliminary 3.2 bcfd, the lowest since October 2021.

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