Severe Winter Weather Drives Gas Demand 

Winter started off with steep temperature drops across the nation in December 2025. Key regions saw storage withdrawals in line with typical winter demand, and as the new year approached, we saw easing temperatures. Production stayed strong during the first half of January 2026, but production overall was heavily impacted by extreme weather. Winter Storm Fern caused freeze-offs for well heads, which due to the size of the storm covering most of the lower 48, had a significant impact on production in January. 2026. The sheer size of the storm, which by the time it made its way to the northeast to become a nor’ easter, resulted in a historic, record-breaking storage withdrawal for the week ending January 30th. This occurred due to a major impact on production being frozen off and significant demand for heat across the country. 

Northeast Spot Market Prices Surge

During this period, wholesale pricing on the spot market in the northeast traded from the teens to the $20 range on the 23rd of January 2026. By the 27th of January, northeast wholesale spot market pricing went over $140 / dth. On the 28th of January 2026, pricing increased on TGP Zone 6 to over $145 / dth. In NY, Iroquois Zone 2 saw historic wholesale numbers on the 27th and 28th of January as well. Those numbers came in above $197 / dth on the 27th and even higher into the $200s / dth on January 28th. Pricing in the northeast stayed elevated through February 10th, where we saw wholesale spot prices begin to decline back below the $20 / dth marker. During this time, the major freeze offs impacted production by over 3 bcf/day. Not only did we see high spot prices for natural gas in January, but combining soaring demand and significant production impacts resulted in Henry Hub pricing averaging $7.72 / dth. 

Global Conflict Impacts Energy Markets 

As if historic cold weather and storm impacts were not enough for the headlines of winter 25/26, the war in Iran has also impacted domestic and global natural gas markets. The Strait of Hormuz sees nearly 20% of the global oil and natural gas pass through. When the war began and the strait closed, we saw global LNG, Oil, and Natural Gas futures skyrocket. Due to the strait being closed (for the most part) the markets for these energy commodities have continued to remain volatile and elevated. Natural Gas production domestically, has aided in shielding the US market from impacts seen across Europe and Asia. Energy Secretaries of Western nations have affirmed energy futures should fall as soon as the Strait of Hormuz has traffic passing again as the world waits to see what is next. Production domestically is expected to increase above 108 bcf/ day as an average for 2026. Strong production will be needed during the storage injection season to replenish stocks withdrawn during the major winter events of 2025/2026.