Topline
Natural gas prices soared on Tuesday for the second straight day ahead of a major snowstorm expected to impact a large portion of the United States, suggesting the market is bracing for potential supply disruption at power plants.
Natural gas prices are skyrocketing due to expected frigid weekend weather across the United States.
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Key Facts
Natural-gas futures — which react quickly to weather forecasts and supply risks — rose about 9% Tuesday and had a similar bump Wednesday morning, jumping to $3.53 after ending the previous week at $2.70.
Other markets showed 50% growth in two days, Bloomberg reported, signaling the makings of the “biggest weekly gain in over 35 years” for natural gas futures contracts, agreements that lock in today’s prices for natural gas to be used months later to heat homes.
Production growth is not keeping up with rising demand, according to the Economic Times, leaving the market more vulnerable to weather-driven shifts.
The price increase comes as the National Weather Service expects “frigid temperatures” across the eastern two-thirds of the U.S. behind an Arctic blast “accompanied by gusty winds, leading to dangerous wind chills.”
The upcoming weather, according to EBW Analytics, will “reshape the near-term natural gas outlook,” CNBC reported.
Since last year, gas utilities are up 10.8%, well above the annual inflation rate of 2.7%, according to the U.S. Bureau of Labor Statistics.
Crucial Quote
“The next two weeks look like they will present the stiffest test for Northeastern heating oil & natural gas markets in nearly a decade,” independent oil analyst Tom Kloza said on X.
Key Background
Economic Times referred to the rising natural gas prices as a “historic surge,” driven “by a tight near-term supply and demand balance” because of the upcoming cold weather. The weather could make things difficult in Texas — the largest natural gas-consuming state — where major gas production facilities are located. Gov. Greg Abbott already activated the state emergency response resources due to expected snow, ice and freezing snow. Possible outages could have worldwide effects, according to Bloomberg, especially in Europe, “which has become more reliant on US cargoes since Russia cut most of its flows to the continent following its invasion of Ukraine.”
Uses For Natural Gas
Natural gas is most often used for generating electricity and space heating, making the rise in prices ahead of a cold surge worrisome for Americans already grappling with elevated utility bills and broader cost-of-living pressures. While wholesale prices do not immediately translate to household utility bills, extended periods of higher natural gas costs can filter through to consumers over time, especially during peak heating season.
Source: https://www.forbes.com/sites/mikestunson/2026/01/21/natural-gas-prices-soar-in-consecutive-days-ahead-of-major-winter-storm/
