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NEW YORK: US natural gas futures gained about 2% on Wednesday on a big drop in daily output over the past three days and forecasts for more demand this week than previously expected.

The shutdown of a pipeline carrying Russian gas through Ukraine also helped support US gas futures and temporarily lifted European prices.

European futures have stabilized in recent weeks at what are still very high levels relative to US prices in part because stockpiles there are filling fast as Russia keeps supplying fuel via pipelines. Those high European prices continue to attract liquefied natural gas (LNG) from the United States and elsewhere.

US front-month gas futures for June delivery rose 14.8 cents, or 2.0%, to $7.533 per million British thermal units (mmBtu) at 9:05 a.m. EDT (1305 GMT).

That leaves the US contract down about 13% from a 13-year closing high on May 5 but up about 104% so far this year as higher global prices keep demand for US LNG exports strong 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 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 climbed to 94.7 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 2.5 bcfd over the past three days to a preliminary two-week low of 93.5 bcfd on Wednesday due mostly to declines in Texas. Preliminary data is often revised.

Refinitiv projected average US gas demand, including exports, would slide from 90.5 bcfd this week to 89.9 bcfd next week. The forecast for this week was higher than Refinitiv’s outlook on Tuesday, while its outlook for next week was lower.

The amount of gas flowing to US LNG export plants rose 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 9.0 bcfd of gas to Europe on Tuesday 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.

Gas stockpiles in Northwest Europe - Belgium, France, Germany and the Netherlands - were about 16% below the five-year (2017-2021) average for this time of year, down from 39% below the five-year norm in mid-March, according to Refinitiv. Storage was currently about 34% of full capacity.

US inventories, meanwhile, were also around 16% below their five-year norm.

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