US natural gas futures rose 4% on Thursday on a smaller-than-expected storage build and a slowdown in output as energy firms shut oil wells and slashed spending on new drilling after crude prices collapsed over the past couple of months due in part to demand destruction from the coronavirus pandemic. Those oil wells also produce a lot of gas.

The price increase came despite forecasts for domestic demand and exports to drop as government lockdowns to stop the spread of the virus cut gas use around the world.

The US Energy Information Administration said utilities injected 103 billion cubic feet of gas into storage during the week ended May 8.

That is slightly less than the 107-bcf build analysts forecast in a Reuters poll and compares with an increase of 100 bcf during the same week last year and a five-year (2015-19) average build of 85 bcf for the period.

The increase during the week ended May 8 boosted stockpiles to 2.422 trillion cubic feet, 20.6% above the five-year average of 2.009 tcf for this time of year.

Front-month gas futures for June delivery on the New York Mercantile Exchange rose 6.5 cents, or 4.0%, to settle at $1.681 per million British thermal units. On Wednesday, the contract closed at its lowest since April 15.

The 8% collapse in the Henry Hub in Louisiana briefly pushed the US benchmark below the front-month Title Transfer Facility (TTF) in the Netherlands for a second day in a row on Thursday. The TTF front-month has mostly traded at a premium to Henry Hub since April 30, when it closed over the US contract for the first time in a decade.

Henry Hub futures, however, continued to trade over TTF in July and August. Analysts said those higher US prices should prompt buyers of liquefied natural gas to continue canceling US cargoes in coming months. In April, buyers canceled about 20 US LNG cargoes due to be shipped in June.

Data provider Refinitiv said US LNG exports averaged 7.0 billion cubic feet per day (bcfd) so far in May, down from a four-month low of 8.1 bcfd in April and an all-time high of 8.7 bcfd in February.