New York, January 22, 2026, 06:30 EST — Premarket
- U.S. Henry Hub natural gas futures climbed roughly 10%, reaching around $5.40 per mmBtu in early Thursday trading
- A cold snap hitting in late January is driving up demand and sparking concerns over production “freeze-offs”
- Traders await the upcoming U.S. storage report to confirm inventory levels
U.S. natural gas prices surged once more in early Thursday trading, with the Henry Hub benchmark climbing past $5 per million British thermal units (mmBtu). Front-month futures gained roughly 10%, hitting about $5.38 per mmBtu by 5:58 a.m. EST. 1
This matters because gas not only heats homes but also powers a significant share of U.S. electricity. When forecasts turn colder, demand often jumps quicker than supply can catch up.
Traders are also monitoring “freeze-offs” — those periods when extreme cold clogs wells and gathering systems — even as liquefied natural gas export plants continue pulling feedgas from the domestic market.
The February contract closed at $4.875 per mmBtu Wednesday, climbing 96.8 cents after a roughly 26% jump the day before. That two-day rally, about 57% in total, marked the biggest surge ever for the front-month contract and sent 30-day implied volatility up to 131.9%. Meanwhile, the spread between February and March contracts hit a record premium of $1.36. LSEG reported Lower 48 production at 108.7 billion cubic feet per day (bcfd) so far in January, down from 109.7 bcfd in December. Demand—including exports—is expected to increase next week. LNG feedgas has averaged 18.5 bcfd this month. Shares of gas producers EQT and Expand Energy gained roughly 6% and 4% Wednesday. 2
“The weather premium has kicked in hard,” Ole R. Hvalbye, commodities analyst at SEB, noted, as a cold snap forced traders to unwind heavy short bets. Eli Rubin from EBW Analytics described the jump as “highlighting the extent of short covering” amid thin market conditions. 3
The U.S. Energy Information Administration reported that working gas in underground storage stood at 3,185 billion cubic feet (Bcf) for the week ending Jan. 9. This marks a decline of 71 Bcf from the previous week but remains roughly 106 Bcf above the five-year average. The next storage update is scheduled for Thursday at 10:30 a.m. 4
East Daley Analytics forecasts a 104 Bcf withdrawal for the week ending Jan. 16 but noted the market is mostly ignoring that potentially bearish figure. Instead, attention is shifting to colder weather forecasts and upcoming storage reports. 5
Pipeline operator Kinder Morgan outperformed Wall Street profit forecasts and reaffirmed confidence in sustained natural gas demand, pointing to increased electricity consumption from data centers. Shares climbed 1.4% after hours. CFO David Michels highlighted that higher transport volumes were boosted by fresh gas expansion projects and a recent acquisition in gathering and processing. 6
Aside from the recent cold snap, a surge of new LNG supply expected in 2026 could weigh on global gas prices and tighten export margins, depending on demand growth rates. Reuters forecasts about 35 million metric tons of additional LNG this year as projects in the U.S., Qatar, and other locations come online. 7
That said, the natural gas price rally hinges heavily on weather forecasts. If models swing toward milder conditions, freeze-offs fall short of expectations, or storage draws underperform, the rally could reverse just as fast.
