US natural gas hits $6 for first time since 2022 on Arctic blast

Futures for February delivery surged as much as 19% in early Asian trading on Monday to $6.288 per million British thermal units

US natural gas soared above $6 for the first time since 2022 as freezing weather swept across much of the country, boosting heating demand and disrupting supplies.

Futures for February delivery surged as much as 19% in early Asian trading on Monday to $6.288 per million British thermal units. That followed a 70% rally last week, the biggest weekly advance in records going back to 1990.

The winter storm sweeping is estimated to have knocked offline almost 10% of US natural gas production, just as demand for the heating and power-plant fuel jumped. The big freeze has strained electricity grids and crippled transport links, grounding thousands of flights.

The largest US grid operator is pushing power plants to secure natural gas supplies through the week on expectations that frigid temperatures will drive electricity usage to a winter record. Gas flows to US liquefied natural gas export plants have dipped to the lowest in a year as the winter storm disrupts output.

Natural gas prices hit the highest since December 2022, when European demand for US LNG was booming after it lost supplies from Russia following the country’s invasion of Ukraine earlier in the year.

The impact on front-month prices is also being exacerbated because the February contract expires on Wednesday, leaving liquidity relatively thin. Open-interest was less than 25,000 contracts on Monday, compared with 340,000 contracts for March futures.

The March contract climbed as much as 11% to $3.997 per million Btu.