Natural gas futures settled above $4 per million British thermal units for the first time since 2011, promising some relief for producers that have suffered decade-low prices in the past year.Gas for delivery in May rose nearly 8 cents, or almost 2 percent, to $4.07 per million British thermal units. That amount is roughly equivalent to 1,000 cubic feet (mcf) of natural gas.The fuel, which has been gaining a much bigger share of the market for electricity generation since beginning a slide that bottomed out last year at under $2 per mcf, has been trending higher in recent weeks. Wednesday, MDA Weather Services in Maryland predicted below-normal temperatures in the Midwest from April 1 through April 10.About 50 percent of U.S. households use gas for heating, according to the Energy Information Administration, the statistical arm of the Energy Department. A similar percentage of Texas homes use natural gas.The futures are up 21 percent this year. Gas last closed above $4 on Sept. 14, 2011.Rising prices come as the nation works off a huge glut of gas. Stockpiles reached a record 3.9 trillion cubic feet in November, but that slid 90 billion cubic feet just last week, according to the median of 18 analyst estimates compiled by Bloomberg.The nation still had 1.9 trillion cubic feet in storage as of March 15 as the end of the winter heating season approaches. That's nearly 10 percent above the five-year average at this date.Despite several years of relatively low prices, marketed gas production will average an all-time high of 69.6 billion cubic feet a day this year, the Energy Information Administration said in its monthly Short-Term Energy Outlook, released March 12 in Washington.Output will rise 0.7 percent from 2012, setting a record for a sixth straight year, the government said. The gains are being driven by production from shale fields, starting with North Texas' Barnett Shale and continuing at the Marcellus Shale in the Northeast, the No. 1 U.S. producer.That production has come despite a marked slowdown in the number of rigs drilling for gas in the U.S. Last week, the gas rig count fell by 13 to 418, according to Baker Hughes Inc. in Houston. That puts it down 3 percent this year.The pattern is similar in the Barnett Shale, where there were 35 active rigs last week. That's up from a 10-year low of 27 in late February, but down from 49 rigs a year ago.The boom in oil and natural gas production has helped the U.S. cut its reliance on imported fuel. America met 84 percent of its energy needs in the first 11 months of last year, government data show.If the trend continued through 2012, it will be the highest level of self-sufficiency since 1991."The forecasts are colder than normal, and we're going to have a pretty bullish inventory report tomorrow," said Dominick Chirichella, senior partner at the Energy Management Institute in New York. "Ending the season with stockpiles strongly below last year's level is a tremendous accomplishment, considering where we started."The cold weather is not all positive for natural gas. Frigid temperatures have reduced output during the winter because water, which is produced with gas, crystallizes and blocks flows from wells.
Staff writer Jim Fuquay contributed to this report, which includes material from Bloomberg News.