Natural gas futures have topped $9 again as supply worries and strengthening European demand have supported the energy commodity. Natural gas prices could top $10 this summer, especially if weather conditions are hotter than normal. Is natural gas setting up for a monster rally in the second half of 2022?

June natural gas futures skyrocketed $0.349, or 3.88%, to $9.342 per million British thermal units (Btu) at 14:41 GMT on Thursday on the New York Mercantile Exchange. Natural gas is poised for a weekly gain of at least 14%, lifting its year-to-date spike to 160%.

According to the US Energy Information Administration (EIA), domestic inventories of natural gas increased 80 billion cubic feet in the week ending May 20, falling short of the market estimate of 89 billion cubic feet. This is also down from the previous week’s build of 89 billion cubic feet.

In total, US supplies of natural gas stand at 1.812 trillion cubic feet, down 387 billion cubic feet from the same time a year ago. They are also 327 billion cubic feet below the five-year average of 2.139 trillion cubic feet.

Natural gas has been on a tear in May, driven by supply concerns and expectations of a hot summer. The energy commodity has rallied 30% this month. But investors might be also pricing in energy woes ahead of winter, particularly as the US diverts more natural gas to Europe.

Since Europe is reducing its dependence on Russian energy products, the eurozone will be turning to the US for at least 60% of its natural gas needs.

Although the US is the world’s largest natural gas producer, the country’s output levels have been lackluster as of late, leading to tight conditions. Some market analysts warn that the US will be unable to satisfy domestic and foreign demand simultaneously, especially if next winter is as terrible as it was this year.

This is why market analysts purport that this period of the year is critical for adding to inventories.

In other energy commodities, June West Texas Intermediate (WTI) crude oil futures surged $3.16, or 2.86%, to $113.49 per barrel. July Brent crude futures added $2.19, or 1.97%, to $113.31 a barrel. June gasoline futures rose $0.0207, or 0.56%, to $3.7460 per gallon. June heating oil futures advanced $0.0459, or 1.22%, to $3.7944 a gallon.