FX.co ★ US Natgas Prices Rally Continues

US natural gas futures surged by over 20% to reach $4.7 per MMBtu on Wednesday, building on a 26% increase earlier in the week due to sharply colder weather forecasts. Over the extended US holiday weekend, predictions shifted to indicate a severe and extensive Arctic freeze affecting much of the nation in the forthcoming weeks. Temperature projections suggest an average decline of at least 8°F below normal in regions like the Midwest, Mid-Atlantic, and parts of New England, with subfreezing temperatures extending into Texas and the Southern states, accompanied by the potential for ice storms and heavy snowfall. This chilly forecast suggests prolonged heating demand and heightened risks of production disruptions from freeze-offs, which could deplete the recent surplus in storage. Up to 10 billion cubic feet per day of production could be impacted in Appalachia, with additional vulnerabilities in the Permian and Haynesville basins. Furthermore, gas supply has been redirected from LNG export facilities to satisfy domestic demand needs.