U.S. natural gas futures plunged 19% on forecasts for a big change in the weather to near-normal levels through mid-February and on a jump in output as frozen wells thaw.
Gas futures for March delivery on the New York Mercantile Exchange fell 81.4 cents, or 18.7%, to $3.54 per million British thermal units (mmBtu), putting the contract on track for its lowest close since January 16.
Massive price changes over the past few weeks boosted historic or actual 30-day close-to-close futures volatility to a record high for a third day in a row, reaching 250.7% on Monday. Higher market volatility increases traders’ opportunities to profit in a shorter amount of time, but also carries greater risks.
That compared with an all-time low of 7.3% in June 1991. Volatility has averaged 126.6% so far this year, up from averages of 68.7% in 2025 and 72.4% over the past five years (2021-2025).
In the cash market, average prices at the Waha Hub in the Permian Shale in West Texas fell into negative territory for the ninth time this year, as pipeline constraints trapped gas in the nation’s biggest oil-producing basin.
Daily Waha prices first averaged below zero in 2019. They did so 17 times in 2019, six times in 2020, once in 2023, a record 49 times in 2024, and 39 times in 2025.
Waha prices have averaged $2.15 per mmBtu so far this year, compared with $1.15 in 2025 and a five-year average (2021-2025) of $2.88. In other news, Devon Energy and Coterra Energy said on Monday they agreed to merge in a $58 billion all-stock deal, to become a large-cap producer with a top position in the Permian Basin as the shale sector consolidates to cut costs and boost scale.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 states rose to 106.6 billion cubic feet per day (bcfd) so far in February, up from 106.3 bcfd in January. That compares with a monthly record high of 109.7 bcfd in December.
After roughly 10 days of extreme cold, meteorologists projected weather across the country would remain mostly near normal through February 17.
LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 159.3 bcfd this week to 147.1 bcfd next week. Those forecasts were higher than LSEG’s outlook on Friday.
Analysts projected energy firms likely pulled so much gas out of storage to meet near-record demand during the Arctic blast last week that stockpiles would go from around 5% above normal for this time of year during the week ended January 23 to about 1% below normal during the week ended January 30.
Average gas flows to the eight large U.S. LNG export plants rose to 18.4 bcfd so far in February, up from 17.8 bcfd in January. That compares with a monthly record high of 18.5 bcfd in December.
(Reporting by Scott DiSavino)