Nat-Gas Weather & Inventory Dynamics

26/01/2026

US Henry Hub (NG1) opened bid after freezing temps in US over the weekend, prices are 10c off the morning high of $6.288/MMbtu (+19%). Delivery month futures have crossed the $6 mark for the first time since 2022 as the US arctic blast has knocked almost 10% of domestic nat-gas production offline. US gas production has fallen by about 10bn cubic feet over recent days as pipelines freeze and flows are restricted, even as demand has climbed by roughly 18bn cubic feet for heating, based on BNEF estimates. Freezing temperatures are expected to drive electricity usage to a winter record. Thin liquidity in the Feb26 contract (which expires on Wednesday) has further exacerbated volatility leading Mar26 futures to rise over 6% to just shy of $4/MMbtu.

Falling US gas production means less feedstock is available for liquefaction terminals, increasing the chances that LNG loadings and shipments will be cut back. Previous freezes have shown just how quickly that can happen. During Winter Storm Uri in 2021, US gas output plunged and LNG exports dropped by almost a third in just one month.

Output later recovered, but the stakes are far higher now: the US now exports significantly more LNG than in 2021 (averaging 17.6 Bcf/d in 2025 vs 9.7 Bcf/d in 2021) … so any weather-driven disruption would likely have a significant knock-on effect for global markets.

The U.S. Department of Energy today issued two emergency orders to mitigate blackouts in New England and Texas, seeking to keep grids stable and minimise the risk of blackouts.

“As Winter Storm Fern brings extreme cold and dangerous conditions across the country, maintaining affordable, reliable, and secure power is non-negotiable,” U.S. Secretary of Energy Chris Wright said in a statement.

Dutch TTF (TZT1) futures rose more than 10% in the first 30 mins of trading to a peak of €43.38/MW after closing out on Friday night at €39.37/MW despite fresh weather updates pointing to milder conditions. Europe remains especially vulnerable. The region now relies heavily on US LNG, and about two-thirds of America’s LNG shipments are headed to Europe. As US supply conditions tighten, European benchmark gas prices have jumped, further pressured by declining storage inventories highlighted in our note from Thursday (see below updated) and swings in supply could intensify.

Even though prices are still well under the extremes seen in 2022, the move higher is worrying as Europe is geared up for record LNG inflows this year.

The European market remains increasingly sensitive as current storage volumes now stand approximately ~15% below the long-term seasonal norm, leaving less buffer against any renewed weather or US supply shocks.

EU Gas reserves are down 3% in a week and continue being depleted at an unusually fast pace this winter.

The heating season is approx. two weeks passed the midpoint and storage facilities across the continent are now on average <46% full as shown by GIE data. This is the second lowest level observed in the past decade, surpassed only in 2022.

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