January's roller coaster
Henry Hub natural gas closed January at $4.35 per million British thermal units, capping the most volatile month in over a year. Prices bottomed at $3.10 on January 16, then surged past $5 within a single week as Winter Storm Fern ravaged production across the Lower 48.
The storm, which also slashed US oil output by 2 million barrels a day, knocked natural gas production from a December record of 109.7 billion cubic feet per day down to a two-year low of 92.5 Bcf/d. That sudden supply gap hit just as heating demand spiked, sending spot prices at Gulf Coast hubs soaring past the equivalent of LNG export values. Briefly, it was more profitable to sell gas domestically than ship it overseas.
Storage draws accelerate
The U.S. Energy Information Administration reported widening storage withdrawals as January progressed. Draws started small, with 119 Bcf for the week ending January 2 and just 71 Bcf the following week as mild weather limited heating demand. The picture shifted quickly.
The week ending January 16 saw a 120 Bcf pull. For the week ending January 23, early estimates pointed to a draw near 238 Bcf, nearly double the prior week. Some forecasters expect the final January report to break 300 Bcf, potentially challenging the all-time weekly record of 359 Bcf set in January 2018.
Total working gas stood at about 3.065 trillion cubic feet as of mid-January, still roughly 6% above the five-year average. That cushion is shrinking fast.
LNG demand adds a structural floor
Even before the storm, a longer-term force was tightening the market. LNG feedgas, the volume of natural gas flowing into US export terminals, hit 17.9 Bcf/d as facilities recovered from shutdowns that had dropped flows to just 11.5 Bcf/d.
About 17% to 18% of all US gas production now feeds LNG export terminals, up sharply from a few years ago. Three new facilities are ramping up: Plaquemines LNG, Corpus Christi Stage 3, and Golden Pass LNG. The EIA projects LNG exports will grow another 9% this year after surging 26% in 2025.
That growth has outpaced storage infrastructure. More gas flows through the system, but the buffer has thinned, leaving less margin for error when a storm knocks out supply and demand spikes simultaneously.
What comes next
Weather models point to colder-than-normal conditions through mid-February, which should keep heating demand firm. Still, the EIA expects Henry Hub to average around $3.50/MMBtu for all of 2026, well below the current $4.35, as production recovers and warmer spring weather eases consumption.
Mid-February often brings sharp swings between late-winter cold snaps and early hints of spring. The gas market has plenty of reasons to stay volatile.