NYMEX December natural gas futures contract jumped 28.3 cents to settle at $3.567/MMBtu Monday on a forecast for colder-than-average temperatures.
The front-month contract traded between $3.437/MMBtu and $3.576/MMBtu.
The January contract also jumped 22.1 cents and settled at $3.531/MMBtu. The February contract rose 17.6 cents to $3.368/MMBtu.
The front-month futures price peaked last winter at $3.631/MMBtu on January 29.
The US National Weather Service expects a cold snap over the next six to 10 days across much of the US, which is likely to increase heating demand.
"Winter is coming and we are off to a cold start," said Phil Flynn, market analyst at Price Futures Group.
Monday's price bounce is also being driven by historically low US gas stocks at the start of the heating season.
Stocks sat at 3.143 Tcf at the end of October, compared with an end-of-October average of 3.799 Tcf since 2010, according to data from US Energy Information Administration.
"The market is very nervous because inventories are very low and there is uncertainty about how long and cold winter will be," Flynn said.
Market participants had previously been confident that the extraordinary level of production gains this year would be able to close the storage deficit and offset high winter demand. Total dry gas production averaged 79.4 Bcf/d so far in 2018, up nearly 8 Bcf/d compared with the year-ago period, according to S&P Global Platts Analytics.
Production is set to average 85 Bcf/d over the next seven days, the data showed.
However, a warm start to fall and a subsequent flip to colder-than average temperatures in October resulted in tight balances, pushing up prices and quashing hopes of closing the inventory gap.
Total demand is expected to be 80.5 Bcf Monday. However, with the expected cold snap, demand is predicted to average 91.3 Bcf/d over the next two weeks, according to Platts Analytics.
The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (0000 GMT).
