US gas futures witnessed a big jump during trading yesterday, Wednesday, as the value of contracts rose by 10% to reach its highest level in two weeks.
The rise in US gas contracts was driven by expectations of increases in demand over the next two weeks, a jump in global gas prices and fears that a possible strike by rail workers in the United States could threaten coal supplies to power plants, according to Reuters.
US gas prices were also supported by the continued shutdown of the Freeport plant in Texas, the second largest US LNG export plant, which was consuming about two billion cubic feet per day of gas before it closed on June 8.
A rail strike could force power generation companies to burn more gas to produce electricity. Coal fuels about 20% of power plants in the United States. About two-thirds of the country's coal-fired power plants receive their coal supply by rail.
US gas contracts for October delivery ended the trading session on the NYMEX up 83 cents, or 10%, to record at a settlement of $9.114 per million British thermal units, the highest level since the first of September.
This is the largest one-day increase in percentage terms since last July 20 and the fifth consecutive session of gains, and it is the longest streak of gains since May 2022.
US gas futures have jumped about 145% this year, while higher prices in Europe and Asia keep demand for US LNG exports strong.
Gas is traded around $62 per million thermal units in Europe and $53 in Asia.
