U.S. natural gas Futures prices jump more than fifteen percent on Tuesday as forecasts call for bitter Arctic cold across the Northeast and Midwest, straining heating markets and lifting gas-producer stocks amid a broader market selloff.
Natural gas futures soar in early trading on Tuesday as traders price in a prolonged cold spell expected to boost heating demand across large parts of the United States. The rally marks a sharp reversal after prices earlier this month fell to their lowest levels since late 2020.
The front-month natural-gas contract rises about 15.2 percent in morning trading, according to market data. The surge follows weeks of weakness driven by mild winter temperatures and rising domestic production, particularly from Appalachia and the Permian Basin.
Arctic Forecast Raises Heating Demand Fears
Weather forecasts are the primary driver of the sudden price spike. The National Weather Service says a “frigid” Arctic air mass is expected to push temperatures fifteen to twenty-five degrees Fahrenheit below normal across the Northeast and Midwest.
Forecasters add that cold conditions are likely to persist through the end of January, raising concerns about heating demand and storage drawdowns. The shift comes after a winter that had been largely warmer than usual.
“The next two weeks look like they will present the stiffest test for Northeastern heating oil and natural gas markets in nearly a decade,” said Tom Kloza, an independent oil analyst, in a comment posted on X.
Despite Tuesday’s rally, natural-gas prices remain well below recent highs. Prices are still down about 32 percent from their December peak, reflecting earlier expectations of ample supply and subdued demand.
Producer Stocks Jump Despite Market Slide
The sharp move in futures prices sends shares of major natural-gas producers higher, even as the broader stock market trades lower. Energy stocks stand out as rare gainers in a down session for the S&P 500.
Expand Energy climbs about 3.8 percent in morning trading, making it one of the top performers in the benchmark index. The stock’s advance follows a recent three-month low.
Benchmark analyst Subash Chandra recently named Expand Energy his top energy pick for 2026, citing its asset base and leverage to improve gas prices. The company’s shares gain traction as investors reposition for colder weather.
Coterra Energy also rose about 3.6 percent, extending gains from last week. The company has drawn investor attention amid multiple reports that it is in merger talks with Devon Energy. Coterra has a market capitalization of about $20.3 billion, while Devon’s market value stands near $22.9 billion.
Natural Gas Futures Market Braces for Volatility Ahead
EQT, the largest U.S. natural-gas producer by output, posts gains of roughly 1.8 percent. The stock rebounds after closing at a four-month low last week.
Analysts say the coming days will test whether the weather-driven rally can be sustained. Storage levels, daily temperature updates, and production data are expected to drive near-term price swings.
If the cold proves less severe or shorter-lived than forecast, prices could retreat quickly, analysts warn. Conversely, prolonged freezing temperatures could tighten supplies and push prices higher, especially in heavily populated regions dependent on Natural gas futures for heating.
For now, traders and utilities are closely watching forecasts, while investors weigh whether Tuesday’s surge marks a turning point or a temporary weather shock in an otherwise oversupplied market.
