Cold Weather Turns Up the Heat on NatGas Prices
By
Sandy Segrist
January 20, 2026 02:46 PM CST
Investors got a cold reminder this week of rule No. 1 on natural gas prices—they follow the weather, first and foremost.
The National Weather Service is forecasting a major winter storm over parts of central and eastern U.S. starting Jan. 23. Wintry precipitation is predicted for the Northeast, the Midwest and the South.
Snow has been predicted as far south as Georgia and freezing rain may be on the schedule for hot-weather haven Houston.
“The next two weeks look like they will present the stiffest test for Northeastern heating oil and natural gas markets in nearly a decade,” Tom Kloza, energy market analyst, wrote on X.
With the release of the National Weather Service’s warning on Jan. 20, natural gas front-month futures prices at the Henry Hub had shot up more than $0.80, above $3.90/MMBtu by late morning. It was the highest natural gas price since the start of 2026.
Even before the storm prediction, natural gas prices had started to rise.
“The market started to turn bullish on holiday pre-trading based on a change in the weather forecast over the weekend,” Jack Weixel, senior analyst at East Daley Analytics, said in an email to Hart Energy.
During the first three weeks of the year, natural gas prices struggled to stay above $3.50/MMBtu. Prices even flirted with the $2 threshold thanks to high production numbers and mild winter weather.
Energy Information Administration’s (EIA) official reports, to be released Jan. 30, are expected to show record highs of U.S. natural gas demand in 2025. The agency predicted at the close of 2025 that domestic consumption would tally a record 91.8 Bcf/d.
The total is expected to decrease to 90.8 Bcf/d for 2026, but an increase in LNG production should offset the decline, according to the EIA.
For the next few weeks, however, the weather will hold sway in the market. As usual during deep cold snaps, the trend is that demand will go up while production goes down.
Analysts predicted high withdrawals for residential and commercial heating for the week. On the other hand, freezing rain means ice is expected to accumulate on power lines and generator equipment, potentially causing power outages.
Weixel said the market will keep a very close eye on upcoming EIA numbers.
“All eyes are on the next two storage report weeks—January 23 and January 30, where a combined 570 Bcf of gas could be withdrawn, whipsawing the market back into deficit territory versus the 5-year average before the end of the month,” he said.
Current forecasts through the first week of February show intensely cold weather moving from the Midwest into the East and South. Most of the nation’s largest population centers east of the Mississippi River will be cold for the balance of the month.
The freeze could also have serious implications on the production side. Bitterly cold temperatures can cause freeze-offs, meaning severe cold drops the equipment at some supply and transport sites to a non-functional state.
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