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NEW YORK: US natural gas futures gained about 2% on Tuesday after plunging 20% over the prior two sessions, on a preliminary drop in daily output and forecasts for more demand next week than previously expected.

Traders noted that increase in US prices came even though gas futures were sliding in Europe as stockpiles there fill fast as Russia keeps supplying gas via pipeline and relatively high prices continue to attract liquefied natural gas (LNG) from the United States and elsewhere.

US front-month gas futures for June delivery were up 15 cents, or 2.1%, to $7.176 per million British thermal units (mmBtu) at 10:11 a.m. EDT (1411 GMT). The contract, however, was still down about 19% after closing at a 13-year high on Thursday, May 5.

Despite the recent price plunge, US gas futures are up about 91% so far this year as higher global prices keeps demand for US LNG exports near record highs since Russia’s Feb. 24 invasion of Ukraine. Gas was trading around $29 per mmBtu in Europe and $23 in Asia.

The US gas market, however, remains mostly shielded from those higher global prices because the United States is the world’s top gas producer, with all the fuel it needs for domestic use while capacity constraints inhibit exports of more LNG no matter how high global prices rise.

Data provider Refinitiv said average gas output in the US Lower 48 states has climbed to 94.8 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in November 2021.

On a daily basis, however, output was on track to drop about 2.0 bcfd to near a two-week preliminary low of 93.7 bcfd on Tuesday due mostly to declines in Texas. That would be the biggest daily decline in overall output since early February, but preliminary data is often revised. Refinitiv projected average US gas demand, including exports, would hold around 90.3 bcfd this week and next week. The forecast for next week was higher than Refinitiv’s outlook on Monday.

The amount of gas flowing to US LNG export plants has risen to 12.3 bcfd so far in May from 12.2 bcfd in April. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas into LNG. Since the United States will not be able to produce much more LNG anytime soon, it has worked with allies to divert LNG exports from elsewhere to Europe to help European Union (EU) countries and others break their dependence on Russian gas.

Russia exported about 9.4 bcfd of gas to Europe on Monday on the three mainlines into Germany - North Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the route from Russia-Ukraine-Slovakia-Czech Republic-Germany - down from an average of around 11.9 bcfd in May 2021.

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