NEW YORK, Feb 4, 2026, 06:21 EST — Premarket
- U.S. natural gas futures climbed roughly 1% early Wednesday following a choppy start to the week
- Attention turns to Thursday’s U.S. storage report as analysts warn of a possible record drawdown
- Production levels and weather forecasts continue to drive swings
U.S. natural gas futures crept up Wednesday morning, the front-month contract hovering near $3.35 per million British thermal units (mmBtu) following a couple of volatile sessions.
Thursday’s federal storage report is shaping up to be a major event. Analysts polled by Platts are forecasting a withdrawal of roughly 366 billion cubic feet for the week ending Jan. 30. If the numbers hold, this would surpass the previous record from January 2018. Phil Flynn, senior account executive at The Price Futures Group, called it “a draw for the ages.” SP Global
Gas has been trading like a weather derivative. After about 10 days of bitter cold, meteorologists now expect temperatures to hover near normal through Feb. 17. Meanwhile, financial firm LSEG estimates Lower 48 production at 106.6 billion cubic feet per day so far this February and predicts demand—including exports—will dip next week. LNG feedgas flows remain volatile as plants bounce back from freeze-related outages.
The sharp reversal came after a historic plunge earlier in the week. On Monday, the March contract closed 25.7% lower at $3.237 per mmBtu, driven by mid-February forecasts turning much warmer. This marked the biggest percentage drop for the front-month since 1995, not counting rollover days, according to Bloomberg.
Storage matters because it acts as the market’s scorecard for winter. Withdrawals refer to gas taken from underground inventories to cover demand, typically for heating and power generation. If the draw is larger than expected, it can tighten the supply-demand balance heading into late winter; if smaller, the opposite can happen quickly.
In late January, a severe freeze cut U.S. LNG exports and temporarily slowed production at multiple plants, including Freeport LNG in Texas, Reuters reported this week. Unusual imports stepped in occasionally to cover the shortfall. Since the U.S. leads global LNG exports, these export fluctuations can ripple back into domestic prices.
Still, the market’s focus remains on one key risk: warmth. If temperatures hover near normal and output stays high, the current storage draw might be a one-time event. Prices could then slip lower, particularly with volatility already stretched thin.
Traders are focused on a clear upcoming event: the Energy Information Administration’s weekly storage report, set for release Thursday at 10:30 a.m. Eastern. Alongside that, the newest weather model updates could swiftly shift demand forecasts in one go.
