Nat-Gas Prices Underpinned by a Historic US Winter Storm

Core Insights - Natural gas prices have surged over 60% this week due to a historic winter storm expected to increase heating demand and deplete inventories [2] - The EIA has revised its forecast for US dry natural gas production in 2026 down to 107.4 bcf/day, indicating potential support for prices [4] Group 1: Price Movements - February natural gas prices closed up by +0.230 (+4.56%) on Friday [1] - Prices remain below Thursday's 3-year nearest-futures high despite the recent surge [2] Group 2: Weather Impact - An Arctic cold front is expected to affect over 150 million people across 24 states, including Texas, which is home to key gas production sites [2][3] - The cold weather may disrupt gas production as water in pipelines freezes, increasing the risk of temporary outages [3] Group 3: Production and Demand - US dry gas production was reported at 109.6 bcf/day, an increase of +8.7% year-on-year [5] - Lower-48 state gas demand was recorded at 126.0 bcf/day, a slight decrease of -0.5% year-on-year [5] - Estimated LNG net flows to US export terminals were 19.8 bcf/day, up +5.3% week-on-week [5] Group 4: Inventory Levels - The EIA reported a draw of -120 bcf in natural gas inventories for the week ended January 16, exceeding market expectations [7] - Current inventories are +6.0% year-on-year and +6.1% above the 5-year seasonal average, indicating sufficient supply [7] - European gas storage was reported to be 48% full, compared to a 5-year average of 62% for this time of year [7]