US natural gas futures jumped more than 70% this week, putting futures on track for their biggest weekly gain in more than three decades, as dangerously cold temperatures are set to take hold of a massive swath of the country.
A storm will descend on the US starting Friday, plunging Texas into a deep freeze before threatening to dump snow on New York City and Boston. The conditions bring the threat of disruptions to gas production as water freezes inside pipelines — a situation that proved disastrous for Texas in 2021, when gas supply outages during extreme cold contributed to a collapse of the state’s power grid.
Weather models turned much colder overnight for the eastern two-thirds of the US through early February, signaling higher energy demand for heating, according to commercial forecaster Commodity Weather Group.
“This is shaping up to be the most impactful storm of the winter so far,” said Jonathan Porter, chief meteorologist at AccuWeather Inc.
Futures for February delivery closed up 25% to $4.875 per million British thermal units, the highest settlement for the front-month contract since Dec. 8, before topping $5/mmbtu shortly after settlement. Prices have climbed 57% so far this week. Exchange operator CME Group said its gas complex reached a single-day record of more than 2.5 million contracts traded on Jan. 20.
“I’ve not seen too many two-day moves like this, and I’ve seen a lot,” said Darrell Fletcher, managing director of commodities at Bannockburn Capital Markets, who has been working in the market since 1995.
Hedge funds turned more bearish on 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. Algorithmic traders, who use computer models to bet on price moves, reached a maximum short position on Jan. 5, according to data from Bridgeton Research Group. The traders went from 100% short late Tuesday to 64% early Wednesday, Bridgeton said.
Surging gas prices spell trouble for US consumers struggling with rising energy bills, which have become a liability for politicians including US President Donald Trump. But they’re a boon to US gas producers, especially those that have not locked in prices for a large share of their planned output through financial hedges.
Top US gas producers EXPAND ENERGY CORPORATION and EQT Corp rose again Wednesday, climbing as much as 4.5% and 6.5%, respectively, as the broader equities market gained.
Rising gas prices can boost coal consumption as electricity producers seek to control their fuel costs by burning less gas and more coal. US power generation from gas slipped 4% in 2025 while coal generation climbed 13%, mainly because high gas prices made coal more competitive, according to the US Energy Information Administration.
The frigid weather is expected to lead to a near-record withdrawal of gas from storage to heat homes and businesses, BloombergNEF said Wednesday. BNEF now expects domestic stockpiles will end March at a deficit to the five-year average, a rapid drawdown from the current 3.4% surplus.
The blast of Arctic air is forecast to bring heavy snow and ice to more than 150 million people across two dozen states, with as much as two feet possible in parts of the Appalachians, according to AccuWeather. That region is home to the Marcellus, one of the largest US gas-producing basins.
EQT, the second-largest US gas producer, will be “working around the clock to keep production flowing” during the upcoming winter storm, Chief Financial Officer Jeremy Knop said in an email.
Frigid conditions are forecast for Texas this weekend, where key gas production sites are located and infrastructure is less hardened to cold weather, raising the chance of temporary outages and reduced shipments overseas. The US is the world’s biggest exporter of liquefied natural gas, and supplies to export terminals now account for about 17% of the nation’s gas production.
The US gas market is “trying to price in” production disruptions through Kansas, Oklahoma and as far south as the Permian basin in West Texas, Dennis Kissler, senior vice president for trading at BOK Financial Securities Inc., said in a note to clients.
Contracts for nearer-term delivery also soared. Cash prices for the Henry Hub trading point in Louisiana — the benchmark for US futures — for the balance of January surged above $11 per million British thermal units Wednesday morning from around $7 on Tuesday and under $4 at the end of last week, according to traders.
The weekend contract rose as high as $18 to $19 per million British thermal units, according to traders. While soaring Henry Hub prices could make US LNG exports uneconomic, it’s unclear whether the elevated weekend prices will be sustained. The volume of gas sent by pipeline to US export plants was little changed on Wednesday, according to BNEF, despite repairs to a conduit feeding Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana.
Cold weather is causing energy prices to surge across the globe. Japan’s power price rose to a three-month high on Wednesday and European gas futures have also soared. Markets are monitoring for a potential weakening of polar vortex winds, which keep extreme cold bottled up in the Arctic, that could bring more freezing temperatures.
Any US output disruptions could affect Europe, which has become more reliant on US cargoes since Russia cut most of its flows to the continent following its invasion of Ukraine. In Asia, where other LNG buyers are located, average temperatures are seen staying below normal through the weekend, according to Atmospheric G2.
European natural gas topped €40 a megawatt-hour on Wednesday for the first time since June, extending this year’s scorching rally to more than 40%, as traders grapple with concerns about unusually cold temperatures across the world.
Europe’s gas market has seen sharp swings in the past two weeks after fuel inventories saw rapid withdrawals, raising concerns about the region’s fragile supply balance and upending market sentiment.
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