New York, Jan 25, 2026, 12:25 EST — Market closed
- U.S. Henry Hub natural gas futures closed Friday at $5.275 per mmBtu, rising 4.6% for the session.
- Traders are on alert for Winter Storm Fern, fearing “freeze-offs” that could disrupt supply and squeeze the power market.
- This week, watch for updated weather forecasts, early signs of production cuts, and the upcoming U.S. storage report on Jan. 29.
U.S. natural gas futures enter the week close to multi-year peaks following a sharp surge. February delivery last changed hands up 23 cents, or 4.6%, settling at $5.275 per million British thermal units (mmBtu). With the contract set to expire on Jan. 28, volatility often rises as trading shifts toward March.
The move is significant as the market braces for a cold snap that could squeeze both supply and demand: heating needs rise even as output risks dropping if wells and gear freeze. Winter storm Fern is forecast to sweep snow, sleet, and freezing rain across a wide swath of the U.S. through Monday, according to the National Weather Service.
Power traders are fixated on the same weather but from different angles. PJM, the biggest U.S. grid operator, saw spot wholesale power prices surge past $3,000 per megawatt-hour early Saturday. On Tuesday, it raised its forecast for a record winter demand peak. “A 40-year-old gas turbine switches on because it sees these super-high prices,” said Georg Rute, CEO of grid software company Gridraven, in comments to Reuters. Reuters
The gas market’s recent jump came on the back of colder weather forecasts and robust liquefied natural gas (LNG) feedgas demand, RBC Capital Markets noted. Meteorologists expect below-normal temperatures through Feb. 6, with heating degree days hitting 581 on Friday, compared to a near-normal 395. “During extreme cold, there are real concerns about equipment freezing — from hydrating wells to pipelines,” said Phil Flynn, senior analyst at Price Futures Group. energynow.com
Storage has become the next reality check. EIA reported net withdrawals of 120 billion cubic feet (Bcf) for the week ending Jan. 16, pushing working gas stocks down to 3,065 Bcf. That’s roughly 6% above the five-year average, offering some buffer to dampen price jumps if the cold snap eases soon.
Beyond the Henry Hub screen, the physical market is signaling trouble. Wood Mackenzie pegged nearly 3 Bcf per day of production as frozen by Friday, with disruptions set to peak on Jan. 26. Kinder Morgan CEO Kimberly Allen Dang told investors this storm “is much shorter in duration” than the 2021 Uri event. Argus Media
Longer-term supply still looks ample, which has kept the curve beyond February sluggish. Baker Hughes said total U.S. oil and gas rigs rose by one to 544 in the week ending Jan. 23, with gas rigs steady at 122. Meanwhile, EIA forecasts suggest gas output will rise in 2026, even as Henry Hub prices are expected to ease over the year.
The tape has been volatile, with a clear risk: if updated weather forecasts show quicker cooldowns or weaker freeze-offs, prices could retreat just as fast as they climbed. Bloomberg noted that front-month futures dropped up to 7.6% intraday Friday following a record three-day rally, underscoring how positioning can be as influential as the weather itself.
As trading resumes, investors will scrutinize each updated temperature map and any sign of bottlenecks in supply. All eyes will be on Thursday’s Jan. 29 storage report, while the Feb. 28-Jan. 28 contract roll will gauge how much of this week’s spike stemmed from weather patterns rather than compelled buying.
