Front-month gas futures for May delivery on the New York Mercantile Exchange rose 3.7 cents, or 2.0pc, to $1.889 per million British thermal units at 8:07 a.m. EDT (1207 GMT).
That put the front-month on track to rise for a fourth day in a row for the first time since April 2019. During those four days, the contract has gained 21pc.
Just last week, however, the contract fell to its lowest since August 1995. Even before the coronavirus started to cut global economic growth and energy demand, gas was already trading near its lowest in years as record production and months of mild winter weather enabled utilities to leave more fuel in storage, making shortages and price spikes unlikely.
Gas futures for the balance of 2020, and calendar 2021, are trading much higher than the front-month on expectations demand will jump in coming months as the economy recovers with the loosening of travel and work restrictions as the spread of the new coronavirus slows. Calendar 2021, has traded at a premium over 2022, for 20 days and over 2025 for 10 days.
With cooler weather coming, data provider Refinitiv projected gas demand in the US Lower 48 states, including exports, will rise from an average of 92.4 billion cubic feet per day (bcfd) this week to 98.6 bcfd next week. That compares with Refinitiv's forecasts on Tuesday of 94.3 bcfd this week and 99.8 bcfd next week.
The amount of gas flowing to US liquefied natural gas export plants, meanwhile, edged up to 8.0 bcfd on Tuesday from a three-week low of 7.8 bcfd on Monday, according to Refinitiv.
That compares with an average of 8.9 bcfd last week due to reductions at Cheniere Energy Inc's Sabine Pass in Louisiana due to a pipeline upgrade.
Unlike the drop in energy use seen around the world so far, US gas use has not yet shown much of an impact from the coronavirus outbreak. Analysts, however, expect to see production and demand drop in the second quarter.
The US Energy Information Administration projected gas production and demand will drop in 2020, and again in 2021, from record highs in 2019, as steps to slow the spread of the coronavirus cut economic activity and energy prices.
On a daily basis, gas production in the Lower 48 states slipped to a two-week low of 92.5 bcfd on Tuesday from 93.2 bcfd on Monday, according to Refinitiv.
That compares with an average of 93.1 bcfd last week and an all-time high of 96.5 bcfd on Nov. 30.