Henry Hub natural gas surged to $5.03 per MMBtu on Tuesday, up 29% from Monday's close near $3.90. The move marks the sharpest rally in months as an Arctic cold front sweeps the eastern United States.
Temperatures in Chicago dropped below zero overnight, with similar readings across the Great Lakes region. The Midwest and Northeast face continued frigid conditions through the week.
Storage draws accelerate
The EIA reported a 71 Bcf withdrawal last week, bringing working gas stocks to 3,185 Bcf. Analysts expect this week's draw to be even larger given the extreme cold.
Natural gas traded as low as $3.01 on January 13 before the weather shift. Prices climbed steadily last week as forecasts turned colder.
LNG exports add pressure
US LNG terminals continue operating near capacity at roughly 14 Bcf per day. Strong Asian and European demand has kept exports elevated, tightening domestic supply during the heating season.
Traders now watch weather forecasts closely as February approaches. Extended cold could push prices higher still.