By Avi Salzman

Frigid weather across the U.S. is causing natural-gas prices to rocket higher, and could keep them elevated for days.

The weather is expected to get so cold in much of the U.S. over the next week, it could even test the resilience of natural gas infrastructure -- risking a supply shock that would send prices even higher.

Natural gas futures jumped 57% to $4.87 per million British Thermal Units across Tuesday and Wednesday, representing the largest two-day increase on record. Natural gas is used largely for heating and electricity. When the weather gets very cold, people use more of it and prices rise. The rise in prices also propelled the stocks of natural gas producers. EQT, for instance, was up 6.2% on Wednesday.

Market dynamics may have exacerbated the price surge. Speculators had built the largest short position in natural gas in 14 months ahead of the latest spike, according to energy research firm EBW Analytics Group. A short position pays off when an asset's price falls. When prices turned higher, those traders had to cover their short bets, making prices rise even more.

The volatility may not be over. The weather is expected to get so cold it risks causing another problem -- breakdowns in natural gas infrastructure.

In a Wednesday note, EBW Analytics wrote that in the next week, there are four days when temperatures are expected to fall below the levels seen during Winter Storm Uri in 2021. That storm turned water vapor into ice at natural gas wellheads, blocking fuel production. And it caused severe damage to the equipment used to process and transport natural gas, forcing a shortfall in gas production. Natural gas production dropped by over 50% in Texas, Oklahoma, and Louisiana, according to one federal report. Millions of people lost heat and electricity, and Texas reported a death toll of 246 people.

Since then, states have invested in weatherization programs to make equipment more resilient. That program could be put to the test in the next week.

Write to Avi Salzman at avi.salzman@barrons.com

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January 21, 2026 15:32 ET (20:32 GMT)

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