Deep Freeze Sends U.S. Natural-Gas Prices Soaring
A severe deep freeze across the U.S., driven by Winter Storm Fern and an Arctic blast, has caused natural gas futures to surge dramatically, topping $7 per million British thermal units (MMBtu) for the first time since 2022. This spike, with February contracts up 29% to around $6.80/MMBtu and reaching intraday highs of $7.439, stems from heightened heating demand amid sub-zero temperatures and supply risks like production freeze-offs in regions such as the Permian and Haynesville basins.
Extreme cold, with average U.S. temperatures forecasted in the low 20s°F around January 24-27, 2026, has boosted residential and commercial consumption to near-record levels, affecting two-thirds of the country. Supply disruptions, including a drop to three-month lows from pipeline freeze-offs in southern fields, compounded the issue, pushing Henry Hub spot prices above $11/MMBtu briefly.
Natural gas futures saw weekly gains over 70%, the largest since 1990, with trading volumes hitting records like 2.5 million contracts in a day. Current real-time quotes show prices at $3.758/MMBtu (down 3.59% intraday), reflecting some pullback from peaks, with a year high of $5.65.
Heating oil futures also rose due to the storm, though crude and gasoline dipped. Inventories face near-record withdrawals, potentially ending March below five-year averages, amid rising AI-driven power demand risks.
