Why is the U.S. natural gas price rising today?
That was the question Rigzone asked Ole R. Hvalbye, a commodities analyst at Skandinaviska Enskilda Banken AB (SEB), in an exclusive interview on Monday.
Responding to the question, Hvalbye highlighted to Rigzone that Henry Hub was trading around $3.5 per million British thermal units (MMBtu) today, “up from [around] … $3.1 per MMBtu before the weekend”, and noted that “the drivers look fairly straightforward and well known rather than structural”.
“Short-term forecasts turned colder across parts of the U.S., lifting heating demand expectations and supporting front-end prices,” Hvalbye told Rigzone.
“Feedgas flows remain elevated and firm, reinforcing near-term demand for U.S. gas and tightening the spot balance marginally,” he added.
“After the recent sell-off, the market was relatively short, so colder weather and steady LNG demand triggered short-covering rather than fresh long positioning,” he continued.
Hvalbye went on to state that, “on the supply side, there’s no disruption story”.
“U.S. production remains strong, storage is still comfortable, and nothing suggests a sudden structural tightening from my data – i.e., a reason why the move looks tactical rather than fundamental,” he pointed out.
Hvalbye highlighted to Rigzone that today’s price increase “isn’t a clean breakout”, adding that prices “are roughly back to where they were a week ago, so part of today’s move is simply retracing last week’s dip”.
“In short: weather plus LNG demand plus positioning explain today’s strength. It’s a bounce, not a regime shift,” he added.
In a separate exclusive interview with Rigzone on Monday, Art Hogan, Chief Market Strategist at B. Riley Wealth, said U.S. natural gas “is bouncing off a 13-week low of $3.10 last week after the weather outlook for late January shifted colder”.
“The colder than normal outlook is expected to drive strong heating demand and higher power generation needs,” he added.
“The combination of rising domestic consumption expectations and alerts from grid operators underpins the price gains,” Hogan told Rigzone.
“Moreover, the cold snap could prompt additional spot LNG purchases in Asia, supporting global natural gas demand,” he continued.
When he was asked why the U.S. natural gas price is rising today in another exclusive interview with Rigzone on Monday, Phil Flynn, a senior market analyst at the PRICE Futures Group, said, “it’s all about the polar vortex”.
“This cold caught some by surprise and it’s not only this cold blast, it’s how far south it’s going and the fact that it might be more sustained than originally thought,” he added.
“You’re seeing a big movement up in the front end of the curve … The market is gapping higher and if this cold stays around for a little bit, it could keep these prices strong,” he continued.
In a J.P. Morgan research note sent to Rigzone by the JPM Commodities Research team early Monday, J.P. Morgan projected that the U.S. natural gas Henry Hub price will average $3.85 per MMBtu in the first quarter of 2026, $3.74 per MMBtu overall this year, and $3.73 per MMBtu overall in 2027.
Enverus projected, in its recently released 2026 energy outlook report, that Henry Hub prices will average $3.80 per MMBtu “through the winter months” and $3.60 per MMBtu “during the summer, before gradually increasing to $4.00-$4.50 per MMBtu by the end of the decade”.
In a BMI report sent to Rigzone by the Fitch Group on Friday, BMI projected that the front month natural gas Henry Hub price will come in at $3.90 per MMBtu this year and $4.00 per MMBtu next year.
The U.S. Energy Information Administration’s (EIA) latest short term energy outlook (STEO), which was released on January 13, forecast that the Henry Hub natural gas spot price will average $3.46 per MMBtu in 2026 and $4.59 per MMBtu in 2027. This commodity averaged $3.53 per MMBtu in 2025, the STEO highlighted.
In its latest STEO, the EIA projected that the Henry Hub natural gas spot price will come in at $3.38 per MMBtu in the first quarter of 2026, $2.75 per MMBtu in the second quarter, $3.42 per MMBtu in the third quarter, $4.28 per MMBtu in the fourth quarter, $4.78 per MMBtu in the first quarter of 2027, $4.30 in the second quarter, $4.43 per MMBtu in the third quarter, and $4.84 per MMBtu in the fourth quarter of next year.
To contact the author, email andreas.exarheas@rigzone.com
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