February Nymex natural gas prices surged to a three-week high on Tuesday, closing at $3.86 per million British thermal units, up $0.804 or 25.91%. The increase is attributed to forecasts of sustained heating demand and potential natural gas production losses in Texas due to upcoming freezing temperatures, with calls for Arctic cold outbreaks over much of North America late this week and into next week.
On the production front, the Energy Information Administration (EIA) has revised its 2026 forecast for U.S. dry natural gas production down to 107.4 billion cubic feet per day (bcf/day) from last month’s 109.11 bcf/day. Current U.S. production is approximately 112.4 bcf/day, marking a 9.3% increase year-over-year. However, lower demand from the lower-48 states for Tuesday was recorded at 121.6 bcf/day, down 11.3% year-over-year, indicating a mixed market outlook.
Despite these factors, the gas rig count has seen a slight decline, falling by two to 122 active drilling rigs last week, a decrease from a high of 130 rigs in late November 2022. Additionally, the latest EIA report for January 9 noted a smaller-than-expected decrease in natural gas inventories, suggesting that supply remains ample in comparison to historical averages.
