NEW YORK: US natural gas futures dropped about 4% on Monday on rising output and forecasts for milder weather and less heating demand than previously expected, which should allow utilities to start injecting gas into stockpiles this week.

That price decline occurred despite a rise in the amount of gas flowing to liquefied natural gas (LNG) export plants to a record high in March after Freeport LNG’s export plant in Texas exited an eight-month outage in February and returned to full power over the past week. Freeport LNG shut in June 2022 after a fire.

Front-month gas futures for May delivery on the New York Mercantile Exchange (NYMEX) were down 8.8 cents, or 4.0%, to $2.128 per million British thermal units at 9:06 a.m. EDT (1306 GMT). On Friday, the contract jumped 5% to its highest close since March 24.

The market has been extremely volatile in recent weeks with the front-month gaining or losing more than 5% in 11 of the past 21 trading days.

With gas market volatility rising, open interest in NYMEX gas futures rose to 1.34 million contracts on Friday, the most since October 2021. Open interest in the front-month contract alone rose to more than 385,000 contracts on Friday, the most since March 2020.