Natural Gas Prices Hit Three-Year High Amid Winter Demand Forecasts
Futures briefly top $5.00/MMBtu as colder weather and record LNG exports tighten supply, boosting shares of major producers like EQT and Expand Energy.
U.S. natural gas futures surged to their highest level in nearly three years this week, briefly crossing the significant $5.00 per million British thermal units (MMBtu) threshold. The rally is fueled by a potent combination of early winter weather forecasts and record-breaking demand for U.S. liquefied natural gas (LNG) exports, signaling a potentially volatile and high-priced season ahead.
The front-month Henry Hub contract climbed past $4.95/MMBtu in early December trading, a level not sustained since early 2023, representing a nearly 50% increase year-over-year. The sharp upward move reflects growing market anxiety over tightening supplies as the primary heating season begins. Forecasts pointing to colder temperatures across the Midwest and Eastern United States are expected to drive a significant uptick in domestic consumption.
Compounding the domestic demand picture is a structural shift in the global energy landscape. U.S. LNG exports have become a critical supply source for Europe and Asia, reaching a record 10.7 million tons in November. This insatiable international appetite has pushed feedgas deliveries to U.S. export terminals to an all-time high of 18.8 billion cubic feet per day (bcfd), according to market reports.
The sustained price strength is providing a powerful tailwind for the nation's leading natural gas producers, whose shares have climbed in response. EQT Corporation (NYSE: EQT), a leading producer, saw its stock rise nearly 3% to $60.32 in recent trading, approaching its 52-week high. Similarly, shares of Expand Energy (NASDAQ: EXE), the new entity formed from the merger of Chesapeake Energy and Southwestern Energy, climbed 2.8% to over $121.00.
Expand Energy, now the largest U.S. gas producer by volume, has stated a focus on operational efficiency and disciplined capital spending for 2025 and 2026, a strategy that stands to yield significant free cash flow in a higher-price environment. EQT has also been active, with an affiliate recently completing a sale of shares in Kodiak Gas Services for gross proceeds of approximately $335.5 million, bolstering its financial position.
Analysts note that while prices have rallied significantly, the market remains on a knife's edge. U.S. natural gas storage levels, while recovering from deficits earlier in the year, still leave little room for supply disruptions or a colder-than-average winter. Traders will be closely watching weekly inventory reports from the Energy Information Administration and upcoming weather model runs for direction.
The current price environment marks a dramatic turnaround from the prolonged downturn that plagued the industry for years, forcing consolidation and a sharp focus on cost reduction. For now, producers are positioned to reap the benefits of higher commodity prices, translating to stronger revenues and improved profit margins heading into 2026.