US natural gas futures jumped nearly 6% on Monday, hitting a 13-year closing high, on a larger-than-expected increase in heating demand and expectations that US liquefied gas exports will remain near record highs.

Gas contracts closed to the nearest maturity of yesterday's trading session, up 5.8%, to settle at $6.643 per million British thermal units, which is the highest closing level since November 2008.

The increase in US prices came despite the decline in oil futures contracts by about 4% and the stability of European gas contracts.

And US gas contracts have recorded a jump of about 78% so far this year, as much higher prices in Europe keep the demand for US LNG near record levels, while several countries are trying to end their dependence on Russian gas after Russia launched its war on Ukraine on February 24 the past.


European gas contracts slump

In Europe, natural gas futures prices continued to decline during Monday night's trading for the seventh consecutive day, in light of indications of the stability of the flow of natural gas supplies from Russia and improving weather conditions in parts of the European continent.

And the Bloomberg news agency reported that orders for shipments of Russian natural gas received through pipelines passing through Ukrainian territory rose, but it is still less than the maximum operating capacity of the transport pipelines, while the operation of the “Yamal-Europe” line continued to transfer gas from Germany to Poland, And not from Russia to Germany via Poland as usual.

The price of the Dutch standard gas contracts fell by 2.2% to 101.5 euros per megawatt-hour for delivery next month in the trading of the Amsterdam Stock Exchange, and the price of British gas decreased by 3.9%.

This comes as forecasts indicate the continued low production of electricity from wind energy in Germany during the next two weeks, which leads to an increase in gas demand despite the approaching end of the winter heating fuel demand season in Europe.

While the European Union agreed last week to ban the import of coal from Russia - the first time that European sanctions have reached the Russian energy sector - Russian gas imports are still far from European sanctions against Moscow over its war on Ukraine.

The Russian state-run Interfax news agency reported that the Russian state-owned Gazprom continued, on Tuesday, to export natural gas to Europe through Ukraine, in line with the demand of European consumers.

The agency quoted the Ukrainian pipeline operator as saying that demand reached 74.5 million cubic meters on Tuesday.


Gas agreement between Algeria and Italy

In this context, Italy signed on Monday an agreement to increase gas imports from Algeria by about 40%, in its first major agreement to find alternative supplies in the wake of the Russian war on Ukraine.

During a visit to Algeria, Italian Prime Minister Mario Draghi said the agreements reached were an important step in Italy's endeavor to end its dependence on Russian gas.

Draghi told reporters in Algiers after a meeting with Algerian President Abdelmadjid Tebboune that there will be other agreements to replace Russian gas supplies to Italy.

Italy - which depends on Russia for about 40% of its gas imports - is seeking to diversify its energy supply mix as the conflict in Ukraine escalates.

And Italy is not the only country seeking alternative supplies. The European Commission has proposed that Europe reduce Russian gas imports by two-thirds this year, to be dispensed with by 2027.

Draghi had previously said that while replacing 30 to 50 percent of supplies from Russia could be achieved immediately, replacing the rest would be much more difficult.

Algeria is the second largest supplier of gas to Italy, and its exports to Italy rose last year by 76% to reach 21.2 billion cubic meters.