NEW YORK: US natural gas futures jumped over 3% to a fresh seven-year high on Wednesday as soaring global gas prices kept demand for US exports high and as almost half of gas production in the Gulf of Mexico remains shut-in from Hurricane Ida damage over two weeks ago.

Traders noted US prices gained despite forecasts for less hot weather and lower demand over the next two weeks than previously expected.

Much of that expected demand decline came from the shutdown of the Freeport LNG export plant in Texas during Tropical Storm Nicholas on Tuesday and upcoming planned maintenance at Berkshire Hathaway Energy’s Cove Point LNG export plant in Maryland that could start early next week. Freeport was expected to take on more gas on Wednesday, which traders said was a sign that the plant was returning to service.

Since Hurricane Ida entered the Gulf of Mexico in late August, gas prices have soared over 35% due to the slow return of production after Ida, hotter than normal US weather and high air conditioning demand this summer, record global gas prices and lower than normal gas inventories in the United States and Europe ahead of the winter heating season, when demand for the fuel peaks. Front-month gas futures rose 17.6 cents, or 3.4%, to $5.436 per million British thermal units (mmBtu) at 8:45 a.m. EDT (1245 GMT), putting the contract on track for its highest close since February 2014 for a third day in a row. That also keeps the front-month in overbought territory for a sixth consecutive day.

Soaring gas prices in recent weeks helped cut the premium of oil futures over gas to its lowest since November 2020. Over the last several years, that premium has prompted US energy firms to focus most of their drilling activity on finding more oil instead of gas because crude was the more valuable commodity.