US natural gas prices whipsawed on Tuesday, topping levels last traded during a historic commodity price boom in 2008, before changing course to fall on news that a large exporter of the fuel would remain closed for longer than expected.

The price moves were reminders of the notorious volatility of the gas market. Even after the late decline, prices remained at levels last hit before shale drilling ushered in a decade of plentiful supplies.

The shale bounty led to the construction of coastal terminals to export liquefied natural gas, a reversal of plans for LNG imports made when US prices were higher.

The importance of overseas demand was demonstrated on Tuesday when Freeport LNG delayed plans to restart its export terminal in Texas from October to November. The terminal, which accounts for about a fifth of total US LNG export capacity, has been closed since it was damaged by an explosion in June.

The delay suggested that some gas shipments will be temporarily stranded in the US. The US gas price dropped 5 per cent to settle at $9.193 a million British thermal units.

Earlier, the benchmark had risen to surpass $10/mn Btu for the first time since 2008, as utilities, industries and traders scour markets to fill storage sites before the winter heating season, worried about further cuts to Russian supplies into Europe.

Gas prices in Europe are far higher than in the US as fears of severe winter shortages grip the market, spreading concerns that energy costs will tip economies into recession. Prices on the continent on Monday hit an intraday record €295 a megawatt-hour, equivalent to about $79/mn Btu, although they eased slightly on Tuesday.

James Huckstepp, an analyst at S&P Global Commodity Insights, said hot temperatures and low output from wind power generators in Europe were also helping to drive prices higher. “The recent hot, dry and relatively still weather is as bullish as it gets,” he said.

In the US, a series of heatwaves this summer has sent demand from gas-fired power plants to record highs as electricity generators increase output to meet demand for air conditioning, the Energy Information Administration said on Tuesday.

High international gas prices have also kept US export terminals running at maximum rates this year as traders capture arbitrage opportunities by shipping gas abroad. Freeport said the initial start-up will produce LNG at below full capacity, and it now does not expect to reach maximum output again until March 2023.

Prices have encouraged more drilling activity, but US gas production has not kept pace with demand. As of mid-August, domestic stocks of working gas stood at 2.519tn cubic feet, about 13 per cent below average.

Most American LNG cargoes this year have been flowing to Europe, to which US president Joe Biden has offered supplies to help offset losses associated with sanctions on Russia over its invasion of Ukraine.

But competition for LNG is expected to intensify as buyers from South Korea, Japan and China start looking to secure supplies ahead of the winter.

Gas prices in the UK have been marginally lower than in Europe for much of the summer as the country has excess LNG import capacity, allowing it to bring in LNG and send it on to Europe via pipelines to help them fill storage sites.

However, the benchmark UK gas price is about $61/mn Btu, similar to offers seen in the Asia market for spot cargoes this week.