U.S. natural gas price increase about 60% over two days this week as an Arctic cold wave and a major winter storm boosted heating demand nationwide, though the spike is unlikely to raise household bills immediately.
Futures tied to the Henry Hub benchmark climbed 29% Wednesday, extending gains in a holiday-shortened week to the largest two-day increase on record. Traders priced in stronger demand as forecasts call for sustained subfreezing temperatures through the end of January across large parts of the country.
Nearly half of American households rely on natural gas as their primary heating source, making weather-driven demand a key driver of prices. The rally reflects expectations that furnaces will run harder as cold air deepens and spreads.
Heating Demand Surges as Arctic Blast Spreads Across U.S.
Forecasters expect a winter storm this weekend to bring heavy snow and ice from New Mexico to the East Coast. Arctic air is forecast to plunge south to Texas, with wind chills ranging from as low as 50 below zero Fahrenheit in North Dakota and northern New England to near zero in south-central Texas.
The National Weather Service’s six- to 10-day outlook calls for substantially colder-than-average temperatures across the eastern half of the country. “This is a prolonged cold pattern that increases heating demand across multiple regions at once,” a National Weather Service meteorologist said, pointing to the breadth of the forecast as a key factor for energy markets.
As temperatures drop, utilities and power generators draw more gas to meet residential heating needs and electricity demand, tightening near-term supply. Analysts say that the combination amplified the price move during a thin trading week.
Global Cold Fuels Gas Rally From Europe to China
The United States is not alone in battling cold weather. Natural gas price increase have risen more than 40% this month in Europe and the United Kingdom, reflecting colder conditions and seasonal demand. An unusual cold spell in China has also pushed prices higher in the global liquefied natural gas market.
LNG and pipeline imports account for about 40% of China’s natural gas usage, making international flows sensitive to weather-driven demand. “When cold hits multiple major markets at the same time, it tightens global balances and feeds back into U.S. pricing,” said an energy market analyst who tracks global gas trade.
The global backdrop matters because LNG exports link U.S. prices to overseas demand, particularly during winter peaks.
Why Higher Prices Will Take Time to Hit Home Bills
Despite the sharp move in futures, consumers are unlikely to see an immediate jump in heating bills tied directly to market prices. It typically takes at least a few months for fluctuations in the natural gas price increase market to work through to retail rates.
In the near term, many households may still see higher expenses simply from using more heat during colder weather. Retail prices also reflect factors beyond spot markets, including utility contracts and demand for gas used to generate electricity.
Energy equities rose alongside the commodity. Shares of EQT Corp. gained about 8.5% over the last two days, while Expand Energy climbed nearly 10%. The U.S. Natural Gas Fund ETF surged 32% this week, closing Wednesday at a six-week high.
“Producers and funds tend to move quickly on weather-driven expectations, while consumers feel changes more slowly,” the analyst said.
