(The Center Square) – Prices for near-term deliveries of U.S. natural gas continued to soar on Monday, rising by almost 28% as a period of cold temperatures settled over much of the country, causing demand to rise and supplies to fall.
The jump in the price of natural gas, which is used in about 60% of American homes for heat or to power major appliances, comes as nearly half of all states declared winter weather emergencies and sub-freezing temperatures spread across the country.
The increase has occurred primarily in the price of near-term contracts, while gas for deliveries in March and April were up only slightly on Monday.
The benchmark contract at the Henry Hub in Louisiana for gas delivered in February settled at $6.806 per million btu, the highest price since December 2022, and an increase of 131% during the last week. The price of natural gas for March delivery settled at $3.901 per million btu, up by 8.8% from the week prior.
Phil Flynn, an analyst at the Price Futures Group, said winter gas demand in late January is at its peak, while freeze-offs caused by extreme cold in major producing states are reducing supply, putting pressure on pipelines and power grids across the country.
“These volatile price movements are directly tied to escalating heating needs, massive, expected storage withdrawals and production setbacks from freeze-offs,” said Flynn.
According to financial firm LSEG, U.S. gas production hit a two-year low 92.6 billion cubic feet on Sunday, mostly due to frozen wells, but output is expected to rise to 95.5 billion cubic feet on Monday.
This compares with a recent high of 110.0 billion cubic feet of gas produced on Jan. 12, and an all-time daily high 111.2 billion cubic feet on Dec. 21.
In addition to unseasonably cold temperatures, analysts say the rapid increase in LNG exports in recent years is another factor behind the short-term increase in the price of natural gas. The U.S. Energy Information Administration, an agency within the Department of Energy, estimates U.S. exports of LNG will average 16.3 billion cubic feet per day in 2026.
Supplies of natural gas over the medium- and long-term are seen as adequate. On Jan. 16, the agency reported gas held in U.S. storage tanks was 4.8% higher than the previous year and 6.1% above the 5-year average for the same time of year.
Export growth is currently outpacing the growth of U.S. natural gas production, and this is expected to continue into 2026. The Energy Information Administration’s January 2026 outlook projects marketed natural gas production will grow by only 1.5% in the year to 119.85 billion cubic feet a day, while LNG exports are forecast to climb 9% to 11% during the same period as three major facilities ramp up.
Residents in regions affected by the weekend winter storm, particularly those in the Northeast and Midwest, could see monthly utility bills jump by $50 to $100 in the next billing cycle, analysts say.
Before the storm, the National Energy Assistance Directors Association had projected Tennessee winter heating bills would rise by $32 on average. The association now warns that total seasonal costs for Tennessee households could increase by more than $100.
Utilities like Entergy Louisiana are permitted to pass the direct cost of natural gas used for power generation to customers through “fuel adjustment” charges. Louisiana residents can expect current high gas prices reflected on their bills in approximately two months.
