(Bloomberg) -- US natural gas closed higher in thin trading after plunging earlier, extending the past week’s historic rally driven by freezing temperatures that pushed up heating demand across the country and disrupted supplies.

Front-month futures settled up 2.3% to $6.954 per million British thermal units as that contract nears expiration on Wednesday, adding to what was the largest single-day gain since 2022 on Monday. The more actively traded March contract settled down 2% from Monday’s close to $3.82 per million Btu in an unusually volatile trading day.

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“This is a bit extreme on the February contract in intraday moves,” said Darrell Fletcher, managing director of commodities at Bannockburn Capital Markets. “Volume is a bit low, but clearly a lot of positioning still going on.”

Gas surged more than 119% in the five days through Monday, the biggest increase in data going back to 1990, as traders and forecasters failed to anticipate the severe winter storm currently engulfing much of the US.

About 50 billion cubic feet of natural gas was taken offline from Saturday through Monday, equivalent to about 15% of US production, as frigid temperatures froze liquids inside wellheads and disrupted operations, BloombergNEF data show. Roughly that amount remained offline Tuesday. That lost output means less supply for the gas-heavy US power sector and home heating.

Weather forecasts shifted warmer on Tuesday, with private forecaster Commodity Weather Group showing slightly less severe cold in the gas-producing states of Texas and Louisiana through the end of the month, while brutally cold weather remains in the prolific gas fields of Appalachia and US Northeast demand centers.

The winter storm is also coinciding with the February contract’s expiration on Wednesday, leaving liquidity relatively thin and amplifying the impact on front-month futures. Traders who have not closed out their positions at expiration are obligated to receive or deliver physical natural gas at the US benchmark Henry Hub in Louisiana throughout February.

The price for next-day delivery of gas at Henry Hub on Monday surged to $30.565 per million Btu, the highest ever reported by S&P Global Energy since agency began publishing spot prices in 1987, a representative for S&P Global said. Henry Hub cash prices retreated on Monday morning, trading closer to $16-17 per million Btu, according to traders.

PJM Interconnection LLC, the operator of the largest US grid that serves 67 million people from New Jersey to Chicago, declared a level-1 emergency for Tuesday, which means every power plant that serves the region is required to be ready to run at full capacity. The Energy Department authorized the grid, along with some units of Duke Energy Corp., to divert some power from data centers, factories and other large facilities to ensure supplies at households and hospitals.

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