New York, January 26, 2026, 06:17 EST — Premarket
- U.S. Henry Hub front-month futures jumped in early trading, pushing the spread with spring contracts wider
- A deep freeze is squeezing near-term supply and driving up demand for heating and power
- Attention turns to the contract expiry midweek and the upcoming U.S. storage report on Jan. 29
U.S. Henry Hub natural gas futures for February delivery surged 91.3 cents, up 17.3%, to $6.188 per million British thermal units (mmBtu) early Monday, close to a 52-week peak of $6.293. Meanwhile, the March contract lagged, starting the session at $3.799 as traders shifted focus to February’s Jan. 28 expiration. 1
The surge is significant as the cold snap hits right in the heart of winter heating season, where even small temperature drops can push gas demand sharply higher. It also increases the risk of “freeze-offs” — blockages caused when water and other liquids in the gas stream freeze, disrupting production.
On Sunday, PJM Interconnection reported nearly 21 gigawatts of generation offline, roughly 16% of demand. It ordered some customers to reduce electricity use under a pre-emergency program as a deep freeze squeezed gas supplies in the East. Pieter Mul, associate partner at PA Consulting, noted, “Without native supplies of natural gas, the Eastern seaboard relies on a pipeline network that is historically constricted during extended bouts of frigid weather.” Meanwhile, Matthew Palmer, head of Americas Gas Research at S&P Global Energy, warned, “the risk isn’t over, with sustained cold lingering behind the storm.” 2
The rally has been gaining momentum for days. U.S. natural gas futures climbed nearly 70% over the past week, driven by higher demand forecasts and concerns that freeze-offs in key producing areas would limit supply. LSEG projects domestic gas demand at 156 billion cubic feet per day (bcfd) this week, compared with a five-year January average of 137 bcfd. At the same time, average U.S. output has dipped to 108.4 bcfd so far this month, down from a December peak of 109.7 bcfd, Reuters reported. 3
Crude prices held steady, yet the storm’s impact is rippling through the energy sector. “Winter storm Fern struck the U.S. coast,” creating “additional stress on the power grid,” noted Priyanka Sachdeva, senior market analyst at Phillip Nova, in a Monday briefing. 4
Warren Patterson from ING noted that Henry Hub surged past $6/mmBtu, hitting its highest level since late 2022 as a storm swept across much of the U.S. BloombergNEF reported U.S. gas output dropped by more than 11 bcfd over the past five days, with LNG export deliveries also down over the weekend. Patterson highlighted that European Dutch TTF gas was trading above 40 euros per megawatt hour (MWh), a key regional gauge. He added, “The market’s strength should be relatively short-lived,” provided the disruptions don’t persist. 5
Storage stands out as the main offset. The U.S. Energy Information Administration’s latest weekly report revealed inventories dropped by 120 billion cubic feet in the week ending Jan. 16, leaving 3,065 Bcf in storage. That’s roughly 6% higher than the five-year average and 5% above last year’s level. 6
But the weather trade can reverse quickly. If forecasts turn warmer or freeze-offs ease sooner than expected, front-month prices often drop just as sharply — particularly when liquidity dries up near expiry.
The forward curve is signaling this is a short-term shock rather than a lasting shift, as contracts further out are priced significantly below the prompt month. This typically indicates the market expects supply pressures to ease once the cold snap ends and flows return to normal.
Traders are focused on pipeline bottlenecks heading into the Northeast and how quickly production might bounce back. They’re also keeping an eye on whether LNG feedgas remains sluggish or picks up again. Stress in the PJM and New England power markets is adding pressure to gas sentiment, especially if outages or curtailments increase.
The next key event is Thursday’s U.S. Natural Gas Storage report from the EIA, set for Jan. 29. It measures the weekly shift in gas stored underground. Since February futures expire the day before, this figure will probably influence the tone heading into the end-of-month roll. 7
