(Bloomberg) -- US and European natural gas futures have posted multiday rallies this week as freezing weather sweeps across major markets for the fuel, sparking a wave of short-covering amid risks of stronger heating demand and disrupted production.

Front-month contracts in the US jumped to the highest since 2022 and are on track for a weekly gain of more than 70%, the biggest such move in records going back to 1990. European futures steadied Thursday after rising around 40% this year.

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Americans are bracing for a severe winter storm that could cause unusually low temperatures across two-thirds of the nation and disrupt major gas production facilities in the south due to a freeze-off, where water solidifies inside pipelines. Consumption is expected to rise as households crank up their heaters, potentially draining inventories.

Hedge funds turned more bearish on US gas at the end of last week, leaving the market poised for a rally as traders rushed to close out those wagers after weather forecasts were revised. In Europe, bearish bets have been elevated since the start of the heating season, before rapid storage withdrawals in recent weeks upended market sentiment.

Surging gas prices spell trouble for consumers struggling with high energy bills. Europe is also getting ready for another cold snap in the next few days, and relies on the US for liquefied natural gas imports ever since it lost most Russian pipeline flows during the 2022 energy crisis.

The continent’s stockpiles are already at unusually low levels after a challenging stockpiling season last summer and repeated cold spells this winter. Any output disruptions in the US would likely also affect other global buyers.

Asia’s gas benchmark jumped this week to the highest level since late-November, according to traders, as the weather in the region turned colder, lifting demand. While the region has ample inventories — unlike Europe — a prolonged cold snap could raise global competition for the fuel.

--With assistance from Stephen Stapczynski.

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