NEW YORK: US natural gas futures jumped about 5% to a 23-month high on Friday on early forecasts for much colder weather in mid-January that could freeze oil and gas wells and lift spot prices by reducing output as in past years.

Also supporting prices was an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants and forecasts for slightly cooler weather than previously expected that should boost heating demand next week.

Front-month gas futures for January delivery on the New York Mercantile Exchange rose 16.4 cents, or 4.6%, to settle at $3.748 per million British thermal units (mmBtu), their highest close since January 2023 for a second day in a row.

With the front-month up about 16% over the past four days and in technically overbought territory for the first time since November, the premium of futures for January over February climbed to a record high of 34 cents per mmBtu.

For the week, the contract was up about 14% after gaining 7% last week.

Recent increases in gas prices coupled with a decline in oil prices, but the oil-to-gas ratio, or the level at which oil trades compared with gas, to 19-to-1 on Friday, the lowest since January 2023. On an energy equivalent basis, oil should only trade six times over gas.

So far in 2024, crude prices have traded about 34 times over gas. That compares with 30 times over gas in 2023 and 20 times over gas during the prior five years (2018-2022).

In other news, US President-elect Donald Trump said the European Union, already the biggest buyer of US energy, should step up US oil and gas imports or face tariffs on the bloc’s exports.

Financial firm LSEG said average gas output in the Lower 48 US states rose to 103.1 billion cubic feet per day (bcfd) so far in December, up from 101.5 bcfd in November. That compares with a record 105.3 bcfd in December 2023.

Meteorologists projected weather in the Lower 48 would remain mostly warmer than normal through at least Jan. 4.

LSEG forecast average gas demand in the Lower 48, including exports, would rise from 124.4 bcfd this week to 130.2 bcfd with cooler weather next week before falling to 119.4 bcfd with milder weather in two weeks. The forecast for next week was higher than LSEG’s outlook on Thursday.