Natural Gas News: LNG Exports Hit Record Highs, Bolstering Futures Amid Tight Inventories

Natural Gas Prices Surge on Cold Weather and Record LNG Demand

U.S. natural gas futures surged on Friday, breaking past the critical $3.766 pivot and hitting their highest levels since late December. This pivot now serves as strong support, with analysts eyeing further gains toward $4.201 if bullish momentum holds. However, the market remains volatile, with rapid changes in weather forecasts and potential profit-taking posing risks of sharp pullbacks.

How Are Colder Forecasts Supporting Prices?

Natural gas futures are climbing as forecasts from NatGasWeather project sustained cold across much of the U.S. through mid-January. The Midwest and Northeast are seeing frigid lows between -10°F and 20°F, while Texas and parts of the South are dealing with overnight temperatures in the 20s and 30s.

Bullish sentiment strengthened after the European weather model turned colder, and the overnight GFS model added 16 heating degree days (HDDs). Another Arctic blast is expected early next week, further boosting demand and putting additional pressure on storage inventories. Demand over the next seven days is forecast to remain “High to Very High,” tightening the supply-demand balance even further.

LNG Demand Breaks Records as Exports Surge

Record-breaking U.S. liquefied natural gas (LNG) exports are bolstering prices, with shipments to Europe spiking. Supply concerns in Europe have intensified after Russia’s natural gas transit agreement through Ukraine ended, coupled with an unplanned outage at Norway’s Hammerfest LNG terminal.

The rising U.S. LNG export activity underscores robust global demand, exacerbating domestic inventory concerns as colder weather grips much of the U.S. Analysts note that with subdued production levels, LNG demand will remain a critical factor influencing price movements.

Can Bulls Sustain Momentum Above $4?

With prices testing the $4 threshold, traders are weighing risks of a rapid reversal. If futures break past $4.201, it could signal increased buying interest, potentially targeting $4.442. However, failure to maintain momentum above $3.766 could expose the market to a slide toward $3.391 or even $3.197.

This weekend’s weather updates will likely set the tone for the week ahead. If the final 10 days of January trend colder, bullish momentum may persist. Conversely, warmer trends or hedge fund profit-taking could trigger a sharp correction.

Market Forecast: Volatile, but Bias Leans Bullish

Short-term momentum suggests a cautiously bullish outlook for natural gas prices. Strong demand from colder weather, record LNG exports, and tight inventories provide significant support. However, traders should remain vigilant, as shifts in weather patterns or a production rebound could quickly alter market sentiment.

More Information in our Economic Calendar.