• Analysts at ING Think stated in a recent note that the potential impact of the freezing conditions in the U.S. on the natural gas output is significant.
• The analysts recalled the storm in February 2021, when natural gas output in the U.S. registered its largest monthly decline on record, falling 7% month-on-month.
• On a positive note, the analysts added that the United States’ natural gas storage remains at comfortable levels.

U.S. natural gas futures continued to climb on Thursday amid freezing weather driven by Arctic cold sweeping the country.

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On Thursday, the benchmark U.S. natural gas futures at Henry Hub, expiring in February, were up by more than 14% at the time of writing to $5.65 per million British thermal units (MMBtu), taking the three-day gains to nearly 81%.

Freezing Weather Heats Up Gas Prices

Analysts at ING Think stated in a recent note that the potential impact of the freezing conditions in the U.S. on the natural gas output is significant. The analysts recalled the storm in February 2021, when natural gas output in the U.S. registered its largest monthly decline on record, falling 7% month-on-month.

“This is leading to a surge in heating demand and raising concerns about potential supply disruptions amid freezing conditions as far south as Texas,” the firm said.

On a positive note, the analysts added that the United States’ natural gas storage remains at comfortable levels. As of January 9, storage stood at 3.19 trillion cubic feet, which is 1% higher year on year and 3.4% above the five-year average, the firm noted.

“This suggests the move should be fairly short-lived, though much will depend on the severity of the storm's impact,” the analysts added.

The Weather Outlook

According to NatGasWeather, the Midwest, Plains, and Texas will have a “dangerously cold weather system” through Friday. The service forecasts these conditions to spread to the rest of the eastern half of the U.S.

“Overall, national demand will be Moderate today, then Very High,” the service said, with regard to natural gas demand.

The United States Natural Gas Fund LP (UNG) was up by 3% at the time of writing, while the ProShares Ultra Bloomberg Natural Gas (BOIL) rose by more than 6%.

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