US natural gas futures plunge 19% as output rises and weather normalizes

ReutersFeb 2, 2026 3:13 PM

Natural gas futures drop due to warmer weather and increased output
Volatility in gas futures reaches record high, boosting trading opportunities
Waha Hub prices fall into negative territory due to pipeline constraints

By Scott DiSavino

NEW YORK, Feb 2 (Reuters) - U.S. natural gas futures plunged 19% on forecasts for a big change in the weather to near-normal levels through mid-February and on a jump in output as frozen wells thaw.

Gas futures for March delivery NGc1 on the New York Mercantile Exchange fell 81.4 cents, or 18.7%, to $3.54 per million British thermal units (mmBtu), putting the contract on track for its lowest close since January 16.

Massive price changes over the past few weeks boosted historic or actual 30-day close-to-close futures volatility to a record high for a third day in a row, reaching 250.7% on Monday. Higher market volatility increases traders' opportunities to profit in a shorter amount of time, but also carries greater risks.

That compared with an all-time low of 7.3% in June 1991. Volatility has averaged 126.6% so far this year, up from averages of 68.7% in 2025 and 72.4% over the past five years (2021-2025).

In the cash market, average prices at the Waha Hub NG-WAH-WTX-SNL in the Permian Shale in West Texas fell into negative territory for the ninth time this year, as pipeline constraints trapped gas in the nation's biggest oil-producing basin.

Daily Waha prices first averaged below zero in 2019. They did so 17 times in 2019, six times in 2020, once in 2023, a record 49 times in 2024, and 39 times in 2025.

Waha prices have averaged $2.15 per mmBtu so far this year, compared with $1.15 in 2025 and a five-year average (2021-2025) of $2.88.

In other news, Devon Energy DVN.N and Coterra Energy CTRA.N said on Monday they agreed to merge in a $58 billion all-stock deal, to become a large-cap producer with a top position in the Permian Basin as the shale sector consolidates to cut costs and boost scale.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 states rose to 106.6 billion cubic feet per day (bcfd) so far in February, up from 106.3 bcfd in January. That compares with a monthly record high of 109.7 bcfd in December.

After roughly 10 days of extreme cold, meteorologists projected weather across the country would remain mostly near normal through February 17.

LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 159.3 bcfd this week to 147.1 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.

Analysts projected energy firms likely pulled so much gas out of storage to meet near-record demand during the Arctic blast last week that stockpiles would go from around 5% above normal for this time of year during the week ended January 23 to about 1% below normal during the week ended January 30. EIA/GAS NGAS/POLL

Average gas flows to the eight large U.S. LNG export plants rose to 18.4 bcfd so far in February, up from 17.8 bcfd in January. That compares with a monthly record high of 18.5 bcfd in December.

	Week ended Jan 30 Forecast	Week ended Jan 23 Actual	Year ago Jan 30	Five-year average (2021-2025) Jan 30
U.S. weekly natgas storage change (bcf):	-352	-242	-155	-190
U.S. total natgas in storage (bcf):	2,471	2,823	2,422	2,490
U.S. total storage versus 5-year average	-0.8%	+5.3%


Global Gas Benchmark Futures ($ per mmBtu)	Current Day	Prior Day	This Month Last Year	Prior Year Average 2025	Five-Year Average (2021-2025)
Henry Hub NGc1	3.62	4.35	3.74	3.62	3.79
Title Transfer Facility (TTF) TRNLTTFMc1	12.11	14.22	15.28	11.94	18.51
Japan-Korea Marker (JKM) JKMc1	11.53	11.47	14.41	12.24	18.12


LSEG U.S. Global Forecast System (GFS) Heating, Cooling and Total Degree Days
Two-Week Total Forecast	Current Day	Prior Day	Prior Year	10-Year Norm	30-Year Norm
U.S. GFS Heating Degree Days (HDD)	430	490	407	415	423
U.S. GFS Cooling Degree Days (CDD)	3	3	14	5	4
U.S. GFS Total Degree Days (TDD)	433	493	421	420	427

LSEG U.S. Weekly GFS Supply and Demand Forecasts
	Prior Week	Current Week	Next Week	This Week Last Year	Five-Year (2021-2025) Average for Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production	98.9	106.9	107.4	105.6	97.8
U.S. Imports from Canada	11.9	9.9	8.8	N/A	9.0
U.S. LNG Imports	0.2	0.1	0.0	0.1	0.1
Total U.S. Supply	110.9	116.8	116.2	N/A	106.9

U.S. Demand (bcfd)
U.S. Exports to Canada	2.5	3.1	3.0	N/A	3.5
U.S. Exports to Mexico	5.7	5.9	5.9	N/A	5.4
U.S. LNG Export Feedgas	15.3	18.5	18.0	15.0	12.6
U.S. Commercial	24.6	21.2	19.3	15.3	14.6
U.S. Residential	43.4	36.3	32.4	24.7	24.0
U.S. Power Plant	41.5	38.2	33.6	32.3	31.8
U.S. Industrial	28.2	27.2	26.2	24.9	25.2
U.S. Plant Fuel	4.9	5.3	5.3	4.9	5.4
U.S. Pipe Distribution	3.9	3.5	3.2	3.9	4.0
U.S. Vehicle Fuel	0.1	0.1	0.1	0.1	0.2
Total U.S. Consumption	146.8	131.9	120.2	106.1	105.2
Total U.S. Demand	170.3	159.3	147.1	N/A	126.7

N/A = Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)	2026 Current Day % of Normal Forecast	2026 Prior Day % of Normal Forecast	2025 % of Normal Actual	2024 % of Normal Actual	2023 % of Normal Actual
Apr-Sep	94	91	76	74	83
Jan-Jul	93	91	78	76	77
Oct-Sep	98	96	80	77	76

U.S. weekly power generation percent by fuel - EIA
	Week ended Feb 6	Week ended Jan 30	2025	2024	2023
Wind	9	8	11	11	10
Solar	4	4	6	5	4
Hydro	5	6	6	6	6
Other	1	1	1	1	2
Petroleum	2	2	0	0	0
Natural Gas	41	39	40	42	41
Coal	21	22	18	16	17
Nuclear	17	17	18	19	19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub	Current Day	Prior Day	This Month Last Year	Prior Year Average 2025	Five-Year Average (2021-2025)
Henry Hub NG-W-HH-SNL	7.18	10.25	4.19	3.52	3.72
Transco Z6 New York NG-CG-NY-SNL	18.07	41.01	4.90	3.53	3.56
PG&E Citygate NG-CG-PGE-SNL	2.19	2.26	3.78	3.42	5.47
Eastern Gas (old Dominion South) NG-PCN-APP-SNL	5.69	8.48	4.03	2.79	2.96
Chicago Citygate NG-CG-CH-SNL	6.36	11.84	4.19	3.23	3.60
Algonquin Citygate NG-CG-BS-SNL	36.00	33.75	13.65	6.08	5.04
SoCal Citygate NG-SCL-CGT-SNL	2.79	2.92	4.19	3.60	5.71
Waha Hub NG-WAH-WTX-SNL	-0.95	1.36	2.76	1.15	2.88
AECO NG-ASH-ALB-SNL	1.44	1.36	1.53	1.13	2.13

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub	Current Day	Prior Day	This Month Last Year	Prior Year Average 2025	Five-Year Average (2021-2025)
New England E-NEPLMHP-IDX	240.00	303.94	134.58	77.61	61.79
PJM West E-PJWHRTP-IX	196.23	370.26	53.89	60.23	54.47
Mid C W-MIDCP-IDX	19.74	22.95	67.87	44.81	68.96
Palo Verde W-PVP-IDX	20.00	19.22	29.05	34.82	59.94
SP-15 W-SP15-IDX	25.30	21.49	25.19	28.44	53.02

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