NEW YORK, Feb 2, 2026, 06:19 EST — Premarket
- U.S. natural gas futures dropped roughly 16% early Monday, wiping out gains from last week’s surge.
- Weather models shifting milder are easing concerns over near-term heating demand.
- Traders are eyeing Thursday’s U.S. storage report along with LNG feedgas flows for the next signal.
U.S. natural gas futures plunged over 16% on Monday, slipping to roughly $3.63 per million British thermal units (mmBtu) following Friday’s close at $4.354.
This pullback is significant since the gas market has been behaving like a weather bet. Just a few model updates can shift prices enough to rattle heating bills, power markets, and the economics behind U.S. liquefied natural gas (LNG) exports.
This comes on the heels of intense volatility sparked by winter storms and freeze-offs, which cut production at wellheads and tightened supply. Traders have had to focus on pricing the coming fortnight, rather than looking ahead to the next couple of quarters.
Forecasts now indicate warmer-than-average temperatures over much of the U.S., likely reducing heating demand despite lingering cold spots. This change has weighed on European gas prices, adding to a wider slump in energy markets.
Last week’s rally came as a cold snap boosted heating demand and threw supply into disarray. U.S. prices surged sharply during the freeze, briefly climbing above the mid-$6 range. ING analysts noted that gas deliveries to LNG plants took a big hit during the storm but have since begun to bounce back.
Storage continues to serve as a key market indicator. The U.S. Energy Information Administration logged a 242 billion cubic feet (Bcf) drawdown for the week ending Jan. 23, pushing inventories down to 2.823 trillion cubic feet (Tcf). Despite the pull, stocks remain above typical seasonal levels.
LNG feedgas is another factor in play. Freeport LNG’s Texas facility was set to ramp up gas intake following a short shutdown last week, according to LSEG data. Traders keep a close eye on these shifts since restarts and pauses there have sparked sudden swings in global gas prices.
Freeport is key since it can swiftly convert U.S. gas into exports. When LNG plants slow down, U.S. prices tend to dip; ramping up, though, tightens domestic supply right at the margin.
“The market is focusing on today’s developments, not the long haul,” Bob Yawger, executive director at Mizuho, noted recently in commentary on the weather-related volatility. S&P Global
The weather trade cuts both ways. Forecasts might shift colder, freeze-offs could persist, and LNG demand could rebound quicker than anticipated — any of these would tighten balances once more and push shorts to adjust.
Traders are eyeing Thursday’s EIA storage report, due at 10:30 a.m. Eastern, alongside updated temperature forecasts and indications that LNG feedgas flows are settling back to normal.
