Gas prices also gained support from a decline in output in recent days, forecasts for more heating demand over the next two weeks than previously expected and record flows to liquefied natural gas (LNG) export plants.
Gas futures for May delivery on the New York Mercantile Exchange rose 35.1 cents, or 10.1%, to settle at $3.816 per million British thermal units.
Earlier in the session, prices for gas and other energy futures dropped on worries U.S. tariffs could reduce global economic growth and demand for energy.
Traders said mild weather and low demand last month likely allowed utilities to add gas to storage in March for the first time since 2012 and only the second time ever for that month.
Gas stockpiles remained about 3% below normal levels for this time of year after cold weather in January and February forced energy firms to pull large amounts of gas out of storage, including record amounts in January.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states fell to 105.9 billion cubic feet per day so far in April, down from a monthly record of 106.2 bcfd in March.
On a daily basis, output was on track to drop by 3.7 bcfd over the past four days to a preliminary six-week low of 103.4 bcfd on Wednesday. Analysts have said preliminary data is often revised later in the day.
Looking forward, analysts noted the roughly 17% drop in U.S. crude futures over the past four days to a near four-year low on Tuesday could prompt energy firms to start cutting back on oil drilling.
Any reduction in oil drilling in shale basins like the Permian in Texas and New Mexico and the Bakken in North Dakota could cut gas output associated with that oil production.
Meteorologists projected temperatures in the Lower 48 states would remain mostly near-normal through April 24.
With seasonally mild weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will fall from 109.5 bcfd this week to 101.2 bcfd next week. Those forecasts were higher than LSEG’s outlook on Tuesday.
The average amount of gas flowing to the eight big LNG export plants operating in the U.S. rose to 16.0 bcfd so far in April, up from a monthly record high of 15.8 bcfd in March.
On a daily basis, LNG feedgas was on track to reach 17.1 bcfd on Wednesday, up from a daily record of 16.8 bcfd on Tuesday, with gas flows to Venture Global’s 3.2-bcfd Plaquemines export plant under construction in Louisiana on track to hit an all-time high of 2.4 bcfd.
The U.S. became the world’s biggest LNG supplier in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia’s 2022 invasion of Ukraine.
Gas was trading near a six-month low of around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and a seven-month low of around $13 at the Japan Korea Marker (JKM) benchmark in Asia.
(Reporting by Scott DiSavino; Editing by Paul Simao and David Gregorio)
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