US natural gas futures plunge 26% after Arctic freeze as weather normalizes (updated)

US Global Investors

02/02/2026 17:58

Natural gas futures drop due to warmer weather and increased output

Volatility in gas futures reaches record high, boosting trading opportunities

Waha Hub prices fall into negative territory due to pipeline constraints

Adds latest prices

By Scott DiSavino

NEW YORK, Feb 2 (Reuters) -
U.S. natural gas futures plunged about 26% to a two-week low that nearly wiped out all of the gains seen since mid-January on forecasts for a big change in the weather from Arctic cold last week to near-normal levels through mid-February.

Gas futures for March delivery NGc1 on the New York Mercantile Exchange fell $1.117, or 25.7%, to settle at $3.237 per million British thermal units (mmBtu), their lowest close since January 16.

Gas futures soared 140% from January 20-28 as extreme cold boosted heating demand to near-record highs and cut output to a two-year low by freezing oil and gas wells, before dropping by 57% from January 29-February 2 as warmer weather thawed wells and boosted output.

Natural gas is "arguably the most volatile commodity contract on the planet," Bob Yawger, director of energy futures at Mizuho, said in a note.

Massive price changes in recent weeks boosted historic or actual 30-day close-to-close futures volatility to a record high for a third day in a row, reaching 257.2% on Monday.

Higher market volatility increases traders' opportunities to profit in a shorter amount of time, but also carries greater risks.

Also weighing on gas futures was a roughly 5% drop in oil prices CLc1, LCOc1 on Monday after U.S. President Donald Trump said Iran was "seriously talking" with Washington, signaling a de-escalation of tensions over the sanctioned OPEC member's nuclear programs. O/R

NEGATIVE PRICES IN TEXAS

In the cash market, average prices at the Waha Hub in the Permian Shale in West Texas fell into negative territory for the ninth time this year, as pipeline constraints trapped gas in the nation's biggest oil-producing basin.

Daily Waha prices first averaged below zero in 2019. They did so 17 times in 2019, six times in 2020, once in 2023, a record 49 times in 2024, and 39 times in 2025.

In other news, Devon Energy DVN.N and Coterra Energy CTRA.N said on Monday they agreed to merge in a $58 billion all-stock deal, to become a large-cap producer with a top position in the Permian Basin as the shale sector consolidates to cut costs and boost scale.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 states rose to 106.6 billion cubic feet per day (bcfd) so far in February, up from 106.3 bcfd in January. That compares with a monthly record high of 109.7 bcfd in December.

After roughly 10 days of extreme cold, meteorologists projected weather across the country would remain mostly near normal through February 17. Temperatures in the U.S. Northeast, however, were still expected to remain below normal for at least another week.

LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 159.3 bcfd this week to 147.1 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.

Analysts projected energy firms likely pulled so much gas out of storage to meet near-record demand during the Arctic blast last week that stockpiles would go from around 5% above normal for this time of year during the week ended January 23 to about 1% below normal during the week ended January 30. EIA/GAS NGAS/POLL

Average gas flows to the eight large U.S. LNG export plants rose to 18.4 bcfd so far in February, up from 17.8 bcfd in January. That compares with a monthly record high of 18.5 bcfd in December.

Week ended Jan 30 Forecast
Week ended Jan 23 Actual
Year ago Jan 30
Five-year average (2021-2025) Jan 30
U.S. weekly natgas storage change (bcf):
-352
-242
-155
-190
U.S. total natgas in storage (bcf):
2,471
2,823
2,422
2,490
U.S. total storage versus 5-year average
-0.8%
+5.3%
Global Gas Benchmark Futures ($ per mmBtu)
Current Day
Prior Day
This Month Last Year
Prior Year Average 2025
Five-Year Average (2021-2025)
Henry Hub NGc1
3.62
4.35
3.74
3.62
3.79
Title Transfer Facility (TTF) TRNLTTFMc1
12.11
14.22
15.28
11.94
18.51
Japan-Korea Marker (JKM) JKMc1
11.53
11.47
14.41
12.24
18.12
LSEG U.S. Global Forecast System (GFS) Heating, Cooling and Total Degree Days
Two-Week Total Forecast
Current Day
Prior Day
Prior Year
10-Year Norm
30-Year Norm
U.S. GFS Heating Degree Days (HDD)
430
490
407
415
423
U.S. GFS Cooling Degree Days (CDD)
3
3
14
5
4
U.S. GFS Total Degree Days (TDD)
433
493
421
420
427
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week
Current Week
Next Week
This Week Last Year
Five-Year (2021-2025) Average for Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production
98.9
106.9
107.4
105.6
97.8
U.S. Imports from Canada
11.9
9.9
8.8
N/A
9.0
U.S. LNG Imports
0.2
0.1
0.0
0.1
0.1
Total U.S. Supply
110.9
116.8
116.2
N/A
106.9
U.S. Demand (bcfd)
U.S. Exports to Canada
2.5
3.1
3.0
N/A
3.5
U.S. Exports to Mexico
5.7
5.9
5.9
N/A
5.4
U.S. LNG Export Feedgas
15.3
18.5
18.0
15.0
12.6
U.S. Commercial
24.6
21.2
19.3
15.3
14.6
U.S. Residential
43.4
36.3
32.4
24.7
24.0
U.S. Power Plant
41.5
38.2
33.6
32.3
31.8
U.S. Industrial
28.2
27.2
26.2
24.9
25.2
U.S. Plant Fuel
4.9
5.3
5.3
4.9
5.4
U.S. Pipe Distribution
3.9
3.5
3.2
3.9
4.0
U.S. Vehicle Fuel
0.1
0.1
0.1
0.1
0.2
Total U.S. Consumption
146.8
131.9
120.2
106.1
105.2
Total U.S. Demand
170.3
159.3
147.1
N/A
126.7
N/A = Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)
2026 Current Day % of Normal Forecast
2026 Prior Day % of Normal Forecast
2025 % of Normal Actual
2024
% of Normal Actual
2023
% of Normal Actual
Apr-Sep
94
91
76
74
83
Jan-Jul
93
91
78
76
77
Oct-Sep
98
96
80
77
76
U.S. weekly power generation percent by fuel - EIA
Week ended Feb 6
Week ended Jan 30
2025
2024
2023
Wind
9
8
11
11
10
Solar
4
4
6
5
4
Hydro
5
6
6
6
6
Other
1
1
1
1
2
Petroleum
2
2
0
0
0
Natural Gas
41
39
40
42
41
Coal
21
22
18
16
17
Nuclear
17
17
18
19
19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub
Current Day
Prior Day
This Month Last Year
Prior Year Average 2025
Five-Year Average (2021-2025)
Henry Hub NG-W-HH-SNL
7.18
10.25
4.19
3.52
3.72
Transco Z6 New York NG-CG-NY-SNL
18.07
41.01
4.90
3.53
3.56
PG&E Citygate NG-CG-PGE-SNL
2.19
2.26
3.78
3.42
5.47
Eastern Gas (old Dominion South) NG-PCN-APP-SNL
5.69
8.48
4.03
2.79
2.96
Chicago Citygate NG-CG-CH-SNL
6.36
11.84
4.19
3.23
3.60
Algonquin Citygate NG-CG-BS-SNL
36.00
33.75
13.65
6.08
5.04
SoCal Citygate NG-SCL-CGT-SNL
2.79
2.92
4.19
3.60
5.71
Waha Hub NG-WAH-WTX-SNL
-0.95
1.36
2.76
1.15
2.88
AECO NG-ASH-ALB-SNL
1.44
1.36
1.53
1.13
2.13
ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub
Current Day
Prior Day
This Month Last Year
Prior Year Average 2025
Five-Year Average (2021-2025)
New England E-NEPLMHP-IDX
240.00
303.94
134.58
77.61
61.79
PJM West E-PJWHRTP-IX
196.23
370.26
53.89
60.23
54.47
Mid C W-MIDCP-IDX
19.74
22.95
67.87
44.81
68.96
Palo Verde W-PVP-IDX
20.00
19.22
29.05
34.82
59.94
SP-15 W-SP15-IDX
25.30
21.49
25.19
28.44
53.02

 (Reporting by Scott DiSavino; Editing by David Gregorio)

 ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net/))