Natural gas futures gained in New York on below-average stockpiles and nuclear power generation that's near the lowest level in almost twelve years. Natural gas futures may rise on speculation that damage to nuclear reactors in Japan after the March 11 earthquake will divert cargoes of the fuel from the U.S., a Bloomberg News survey showed.

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Japan may need to import as much as 1.5 million metric tons of natural gas scheduled for the Atlantic Basin to meet additional demand. Japan is the biggest user of natural gas, accounting for 35 percent of global trade.

Japan boosted spot imports of liquefied natural gas from the Atlantic Basin fivefold after a 2007 earthquake shut the Kashiwazaki-Kariwa nuclear plant. "The market is expecting more natural gas consumption in Japan for electricity generation," said Gordy Elliot, a risk- management specialist.

The U.S. government has said that it could tap its strategic oil reserves in order to safeguard economic growth as gasoline prices surge. While U.S. policy is to release oil reserves only in the event of a significant and immediate supply shortage, the Obama administration may feel compelled to try to tamp down prices.

There are reasons to believe the oil reserves could be used more liberally now. U.S. federal law allows the government to tap the oil reserves during a national energy supply shortage that raises petroleum prices and could damage the economy. The president has the authority to determine such an emergency.

"If necessary, the oil reserves could be mobilized to help mitigate the effect of a severe, sustained supply disruption," U.S. Treasury Secretary told the U.S. Senate Foreign Relations Committee.

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Russia oil production remained near post-Soviet records in February, at 10.23 million barrels a day. Crude exports from the country have advanced 2% month-over-month as well. The Russian Prime Minister Vladamir Putin has pledged that Russia's oil production will remain elevated above 10 million barrels a day for at least a decade, as he ordered tax incentives to be created to encourage companies to invest in new projects.

Production by Russia's two largest oil producers, OAO Rosneft and OAO Lukoil actually fell on a monthly basis, but this drop was made up for by gains from OAO Gazprom, smaller producers, and projects run under production sharing agreements with Royal Dutch Shell Plc, Exxon Mobil Corp., and Total SA. Russian natural-gas output declined to 2.04 billion cubic meters a day last month, and is also down from a year ago.