Cold Front Causes U.S. Natural Gas Futures to Jump 45%
Gas futures are rising cross the United States and other parts of the world as a severe cold front moves in that should stock around for day
Quick overview
- A massive cold front is set to impact the Midwest, Northeast, and South, causing natural gas prices to surge by 45% in just two days.
- Winter Storm Fern is expected to bring heavy snow and ice from Friday to Monday, affecting around 180 million people across the U.S.
- Natural gas futures have risen to $4.7/MMBtu, marking the largest price increase in 35 years and signaling a potential recovery for the gas market.
- The cold weather is expected to boost heating demand significantly, potentially eliminating the excess storage that has affected the industry.
This weekend, a massive cold front will be assaulting the Midwest, Northeast, and South, and the forecast caused natural gas prices to climb 45% in two days.
A cold front of arctic wind will affect the United from New Mexico to New England, spiking demand for natural gas and heating resources. The natural gas market saw a massive increase in prices as a result, with a 20% jump on Wednesday. That brings natural gas futures up to $4.7/MMBtu and adds to the week’s earlier gains.
This cold weather is hitting about the time that forecasters predicted, but it is far stronger than expected and could give the gas market a much needed boost after weeks of declining prices. Gas had recently hit a low of $3.13 in January before the cold weather set in.
Winter Storm Fern Expected to Bring Heavy Snow
This is more than just a cold front that will come and go very quickly. The storm, labeled Winter Storm Fern, is expected to last from Friday until Monday next week, and with it will come considerable snow and ice, affecting millions of homes and businesses across the United States.
What was an unusually mild winter for the United States is now one that is more severe than expected. About half of the U.S. population is expected to feel it in some way, which could mean around 180 million people with increased heating needs.
The Henry Hub prices jumped 40% in just two days, and similar cold fronts are affecting the European and Asian markets. The global cooling off is spiking demand everywhere and causing gas companies to tap into reserves that have lain untouched for months. This could very well bring prices back up to where they were before the early 2025 slide. That slide was caused primarily by excessive injections into the gas reserves with little demand for heating as the year was unusually warm.
The increase in gas futures marks a milestone gain for the industry. In fact, it is the largest price increase that natural gas has seen in 35 years. The incoming cold front should create continuous rising demand for heating and spur growth in the gas sector, and analysts speculate that it could completely eliminate the storage excess that has plagued the industry for months.
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