Prices pull back from December peak
Natural gas prices have retreated sharply from mid-winter highs, with Henry Hub futures trading at $3.10 per million British thermal units (MMBtu) on Friday. The benchmark is down roughly 30% from its December 23 peak of $4.41/MMBtu.
The decline follows a period of elevated prices driven by cold weather across much of the United States in late December. As temperatures have moderated in January, heating demand has eased and prices have followed.
Storage levels provide cushion
US natural gas storage remains adequate heading into the second half of winter. According to the Energy Information Administration, inventories have declined at a slower pace than the five-year average in recent weeks, helping to pressure prices lower.
The EIA projects natural gas prices will average around $3.00/MMBtu in 2026, suggesting current levels are close to expected norms despite the sharp pullback from December highs.
What to watch
Traders are monitoring weather forecasts for any return of colder temperatures that could spark renewed demand. The week ahead shows mixed conditions across key consuming regions.
LNG export demand continues to provide underlying support for US natural gas production, with new export capacity coming online throughout 2025 and 2026. However, near-term price direction will likely be driven by weather patterns and storage draws through February.