Natural gas futures surge 25% amid cold weather demand

Investing.com -- Natural gas futures surged 25% to $3.88 per MMBtu by 8:19 a.m. Eastern on Monday, as a blast of winter weather raised concerns about heating demand across large swaths of the U.S. Traders pointed to forecasts calling for an unusually cold pattern that is expected to lift consumption from households and businesses at a time when the market was already on edge.

Pete Gallagher, an energy trader at Mizuho, said the move had taken on a parabolic character, with prices accelerating as investors rushed to adjust positions. He attributed the spike to a so-called Bomb Cyclone moving across the country, a powerful storm system that can bring rapid drops in temperature along with heavy snow and strong winds. Such systems often trigger abrupt swings in energy markets as utilities and end users seek to secure supply.

The rally underscores how sensitive natural gas prices remain to weather-driven shifts in demand. Even modest changes in forecasts can set off large moves, particularly in winter, when heating needs dominate consumption. The latest surge also reflects a broader scramble among traders to price in the risk that cold conditions persist longer than previously expected, tightening the market and keeping volatility elevated.

Today’s massive move higher is a sharp reversal of recent trends. Natural gas has plunged from over $5.20 per MMBtu, where it traded at the beginning of December, amid a cold polar vortex and strong export demand. At that time, natural gas had not traded above $5 since 2022.

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