Natural gas futures climbed sharply on Monday as forecast models indicated significantly colder temperatures across key U.S. regions during the final week of January, boosting heating demand and tightening near-term supply outlooks. The rally was reflected in NGZ6, which gained over 5% in early trading.
- NGZ6 futures rose 5.3% to $3.48/MMBtu on colder weather expectations
- Forecasted temperatures 8–12°F below normal in Midwest and Northeast
- Expected weekly natural gas withdrawal of 180 Bcf, up from 150 Bcf
- Storage levels at 3.2 Tcf, 1.8% below five-year average
- UNG gained 4.7%, FAN surged 9.1% on the day
- EIA storage report due January 26, expected to influence near-term trading
US natural gas prices spiked on Monday, with the front-month NGZ6 contract rising 5.3% to settle at $3.48 per million British thermal units, marking its strongest daily increase in two weeks. The move followed revised weather forecasts from multiple private meteorological services predicting a pronounced cold snap across the central and eastern United States from January 25 to January 31. This shift in outlook heightened concerns over elevated heating demand during a historically volatile period for energy consumption. The National Oceanic and Atmospheric Administration’s updated 14-day forecast indicated that average temperatures in the Midwest and Northeast would fall 8 to 12 degrees Fahrenheit below normal, driving up the need for gas-fired heating. Storage levels, already at 3.2 trillion cubic feet as of January 16—1.8% below the five-year average—were seen as vulnerable to accelerated withdrawal rates if the cold persists. Market participants now anticipate a pull of 180 billion cubic feet from storage in the week ending January 31, up from the previous estimate of 150 billion. The rally extended to related exchange-traded products, with UNG, the United States Natural Gas Fund, gaining 4.7% in early trading, while FAN, the Direxion Daily Natural Gas Bull 2X Shares, rose 9.1% on the day. Analysts noted that the short-term price momentum is likely to continue as traders adjust positions ahead of the week’s key EIA storage report, due January 26. The shift underscores the sensitivity of natural gas markets to weather volatility and the importance of accurate seasonal forecasts in commodity pricing. The price surge has implications for utilities, industrial consumers, and energy hedge funds, particularly those with exposure to gas-based power generation. Power producers in PJM and MISO regions are preparing for higher fuel costs, while residential and commercial customers in colder states may face elevated heating bills.