February Nymex natural gas (NGG26) on Tuesday closed up sharply by +0.804 (+25.91%),
Feb nat-gas prices surged to a 3-week high on Tuesday and settled sharply higher. The latest weather outlook signals sustained heating demand and possible nat-gas production losses in Texas due to freezing temperatures. Forecaster Atmospheric G2 said Tuesday that “All signs point to major Arctic cold outbreaks over the eastern two-thirds of North America late this week and into much of next week.” Also, an arctic blast will push into Texas over this weekend, dropping temperatures below freezing, potentially leading to freeze-offs in wells that halt nat-gas production.
Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis.
Projections for lower US nat-gas production are supportive for prices. The EIA last Tuesday cut its forecast for 2026 US dry nat-gas production to 107.4 bcf/day from last month’s estimate of 109.11 bcf/day. US nat-gas production is currently near a record high, with active US nat-gas rigs recently posting a 2-year high.
US (lower-48) dry gas production on Tuesday was 112.4 bcf/day (+9.3% y/y), according to BNEF. Lower-48 state gas demand on Tuesday was 121.6 bcf/day (-11.3% y/y), according to BNEF. Estimated LNG net flows to US LNG export terminals on Tuesday were 19.0 bcf/day (+0.5% w/w), according to BNEF.
As a negative factor for gas prices, the Edison Electric Institute reported last Wednesday that US (lower-48) electricity output in the week ended January 10 fell -13.15% y/y to 79,189 GWh (gigawatt hours), although US electricity output in the 52-week period ending January 10 rose +2.5% y/y to 4,294,613 GWh.
Last Thursday’s weekly EIA report was bearish for nat-gas prices, as nat-gas inventories for the week ended January 9 fell by -71 bcf, a smaller draw than the market consensus of -91 bcf and well below the 5-year weekly average draw of -146 bcf. As of January 9, nat-gas inventories were up +2.2% y/y and were +3.4% above their 5-year seasonal average, signaling ample nat-gas supplies. As of January 13, gas storage in Europe was 52% full, compared to the 5-year seasonal average of 68% full for this time of year.
Baker Hughes reported last Friday that the number of active US nat-gas drilling rigs in the week ending January 16 fell by -2 to 122 rigs, falling further below the 2.25-year high of 130 set on November 28. In the past year, the number of gas rigs has risen from the 4.5-year low of 94 rigs reported in September 2024.
On the date of publication,
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
For more information please view the Barchart Disclosure Policy
here.
More news from Barchart
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
#NatGas #Prices #Soar #Arctic #Blast #Invades