Extreme cold boosts heating demand, cuts output by freezing wells
Gas output drops to three-month low due to freeze-offs
Market ignoring expected bearish storage withdrawal
By Scott DiSavino
NEW YORK, Jan 22 (Reuters) - U.S. natural gas futures rose to a four-year high on Thursday after soaring by a record 71% over the past three days on forecasts that extreme cold weather over the next two weeks will boost heating demand to near-record levels while at the same time cutting output by freezing oil and gas wells.
Front-month gas futures for February delivery (NGc1) on the New York Mercantile Exchange (NYMEX) jumped 45.8 cents, or 9.4%, to $5.333 per million British thermal units (mmBtu), putting the contract on track for its highest close since December 2022.
Traders said the market was mostly ignoring the expected release of a federal report later on Thursday that is expected to show a smaller-than-usual storage withdrawal last week when mild weather kept heating demand low.
Analysts forecast energy firms pulled 106 billion cubic feet (bcf) of gas out of storage during the week ended January 16. That compares with a decline of 228 bcf during the same week last year and an average withdrawal of 191 bcf over the past five years (2021-2025). (EIA/GAS) (NGAS/POLL)
Even though that small withdrawal will likely leave stockpiles about 7% above normal levels for this time of year, analysts said utilities will likely wipe out that excess inventory by pulling massive amounts of gas from storage to provide the fuel needed to keep homes and businesses warm over the next two weeks of extreme cold.
<h3>SUPPLY AND DEMAND:</h3>
Financial firm LSEG said average gas output in the Lower 48 states slid to 108.6 billion cubic feet per day (bcfd) so far in January, down from a monthly record high of 109.7 bcfd in December.
On a daily basis, output was on track to drop to a three-month low of 106.1 bcfd on Thursday due mostly to reductions in North Dakota and Oklahoma, according to LSEG data, down from a recent high of 110.0 bcfd on January 12 and an all-time daily high of 111.2 bcfd on December 21.
Analysts noted some of the output decline seen so far this week - down about 3.9 bcfd since January 12 - was due to freezing oil and gas wells, known in the energy industry as freeze-offs.
In past winters, freeze-offs have slashed gas output by massive amounts, including the loss of around 17.2 bcfd from January 8-16 in 2024, cuts of 15.8 bcfd from December 20-24 in 2022, and the drop of 20.4 bcfd from February 8-17 in 2021, according to LSEG data.
Meteorologists projected weather across the country would remain mostly colder than normal through February 6, with the most frigid days expected around January 24-31.
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 152.4 bcfd this week to 162.1 bcfd next week. Those forecasts were higher than LSEG’s outlook on Wednesday.
With temperatures forecast to average just 22.0 degrees Fahrenheit (-5.6 Celsius) across the country on January 24 and continue averaging in the low 20s F through January 31, LSEG projected total demand, including exports, would reach 180.6 bcfd on January 26. That demand forecast was higher than LSEG’s outlook on Wednesday.
But that figure would fall just short of the Lower 48 daily demand record of 181.2 bcfd set on January 21, 2025, when temperatures across the country averaged just 19.4 F, according to LSEG data.
Average gas flows to the eight large U.S. LNG export plants have held at 18.5 bcfd so far in January, matching the monthly record high set in December.
Week Week Year Five-ye
ended ended ago ar
Jan 16 Jan 9 Jan average
Forecas Actual 16 (2021-2
t 025)
Jan 16
U.S. weekly -106 -71 -228 -191
natgas storage
change (bcf):
U.S. total natgas 3,079 3,185 2,924 2,888
in storage (bcf):
U.S. total +6.6% +3.4%
storage versus
5-year average
Global Gas Current Prior This Prior Five-Ye
Benchmark Futures Day Day Month Year ar
($ per mmBtu) Last Average Average
Year 2025 (2021-2
025)
Henry Hub (NGc1) 5.55 4.88 3.72 3.62 3.79
Title Transfer 13.33 13.32 14.67 11.94 18.51
Facility (TTF)
(TRNLTTFMc1)
Japan-Korea 11.34 10.81 14.16 12.24 18.12
Marker (JKM)
(JKMc1)
LSEG U.S. Global
Forecast System
(GFS) Heating,
Cooling and Total
Degree Days
Two-Week Total Current Prior Prior 10-Year 30-Year
Forecast Day Day Year Norm Norm
U.S. GFS Heating 592 552 487 435 451
Degree Days (HDD)
U.S. GFS Cooling 1 1 1 3 3
Degree Days (CDD)
U.S. GFS Total 593 553 488 438 454
Degree Days (TDD)
LSEG U.S. Weekly
GFS Supply and
Demand Forecasts
Prior Current Next This Five-Ye
Week Week Week Week ar
Last (2021-2
Year 025)
Average
for
Month
U.S. Supply
(bcfd)
U.S. Lower 48 Dry 109.0 107.3 107.3 101.1 98.6
Production
U.S. Imports from 9.7 10.5 9.8 N/A 9.6
Canada
U.S. LNG Imports 0.1 0.1 0.0 0.1 0.1
Total U.S. Supply 118.8 117.9 117.1 N/A 108.3
U.S. Demand
(bcfd)
U.S. Exports to 3.8 3.0 3.0 N/A 2.9
Canada
U.S. Exports to 6.1 5.9 5.8 N/A 5.8
Mexico
U.S. LNG Export 18.3 18.8 18.6 13.4 12.8
Feedgas
U.S. Commercial 15.9 19.8 24.8 23.2 17.3
U.S. Residential 26.5 33.6 43.9 41.0 29.9
U.S. Power Plant 32.1 35.8 38.5 40.9 32.5
U.S. Industrial 25.4 26.7 28.2 27.7 26.0
U.S. Plant Fuel 5.4 5.3 5.3 5.4 5.2
U.S. Pipe 2.9 3.3 3.9 2.9 4.4
Distribution
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.2
Total U.S. 108.3 124.7 144.8 141.2 115.5
Consumption
Total U.S. Demand 136.6 152.4 172.1 N/A 137.0
N/A = Not
Available
U.S. Northwest 2026 2026 P 2025 2024 2023
River Forecast Current rior % of % of % of
Center (NWRFC) at Day % Day % Norma Normal Normal
The Dalles Dam of of l Actual Actual
(Fiscal year Normal Normal Actua
ending Sep 30) Forecas Forecas l
t t
Apr-Sep 94 95 76 74 83
Jan-Jul 94 95 78 76 77
Oct-Sep 99 99 80 77 76
U.S. weekly power
generation
percent by fuel -
<h3>EIA</h3>
Week Week 2025 2024 2023
ended ended
Jan 23 Jan 16
Wind 11 13 11 11 10
Solar 5 5 6 5 4
Hydro 7 7 6 6 6
Other 1 1 1 1 2
Petroleum 0 0 0 0 0
Natural Gas 38 36 40 42 41
Coal 20 17 18 16 17
Nuclear 19 20 18 19 19
SNL U.S. Natural
Gas Next-Day
Prices ($ per
mmBtu)
Hub Current Prior This Prior Five-Ye
Day Day Month Year ar
Last Average Average
Year 2025 (2021-2
025)
Henry Hub 4.96 4.00 4.13 3.52 3.72
(NG-W-HH-SNL)
Transco Z6 New 4.72 3.70 8.77 3.53 3.56
York
(NG-CG-NY-SNL)
PG&amp;E Citygate 2.99 2.50 3.87 3.42 5.47
(NG-CG-PGE-SNL)
Eastern Gas (old 4.52 3.24 3.74 2.79 2.96
Dominion South)
(NG-PCN-APP-SNL)
Chicago Citygate 4.83 3.72 3.93 3.23 3.60
(NG-CG-CH-SNL)
Algonquin 12.55 14.75 15.67 6.08 5.04
Citygate
(NG-CG-BS-SNL)
SoCal Citygate 3.69 3.22 4.49 3.60 5.71
(NG-SCL-CGT-SNL)
Waha Hub 1.48 0.60 3.27 1.15 2.88
(NG-WAH-WTX-SNL)
<h3>AECO 1.98 1.65 1.22 1.13 2.13</h3>
(NG-ASH-ALB-SNL)
ICE U.S. Power
Next-Day Prices
($ per
megawatt-hour)
Hub Current Prior This Prior Five-Ye
Day Day Month Year ar
Last Average Average
Year 2025 (2021-2
025)
New England 100.75 143.14 147.8 77.61 61.79
(E-NEPLMHP-IDX) 8
PJM West 49.48 58.00 75.11 60.23 54.47
(E-PJWHRTP-IX)
Mid C 40.70 30.37 52.79 44.81 68.96
(W-MIDCP-IDX)
Palo Verde 36.50 30.50 44.47 34.82 59.94
(W-PVP-IDX)
<h3>SP-15 40.71 36.59 39.98 28.44 53.02</h3>
(W-SP15-IDX)

U.S. natural gas futures surged to a four-year high, rising 71% over three days due to extreme cold weather increasing heating demand while freezing wells reduced output. February futures on NYMEX jumped 9.4% to $5.333 per million British thermal units. Despite expectations of a smaller-than-usual storage withdrawal, analysts predict utilities will deplete excess inventory to meet heating needs. Average gas output in the Lower 48 states fell to a three-month low, with demand projected to rise significantly in the coming weeks as frigid temperatures persist.

Reuters

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US natgas futures soar to four-year high as frigid weather boosts heating demand, freezes wells