U.S. Natural Gas Storage Drops Sharply as Prices Surge on Weather Uncertainty

U.S. natural gas storage levels posted a substantial decline for the week ending January 23, 2026, underscoring the market’s heightened sensitivity to winter weather shifts and production volatility. Working gas in underground storage across the Lower 48 states fell to 2,823 billion cubic feet, reflecting a net withdrawal of 242 Bcf from the prior week. The draw exceeded the typical seasonal pace and helped fuel a sharp rally in natural gas futures.

Despite the sizeable withdrawal, storage levels remain relatively comfortable. Current inventories stand 206 Bcf higher than the same period last year and 143 Bcf above the five-year average of 2,680 Bcf. Total working gas remains within the historical five-year range, offering some buffer against near-term supply risk even as demand expectations fluctuate.

Regional data highlights broad-based withdrawals driven by colder conditions and elevated heating demand. The South Central region posted the largest decline, shedding 89 Bcf to end the week at 1,050 Bcf. The Midwest followed with a 76 Bcf withdrawal, while the East recorded a 55 Bcf draw. Smaller but notable declines were seen in the Mountain and Pacific regions, reflecting consistent winter demand across much of the country. Salt cavern storage in the South Central region experienced particularly strong withdrawals, reinforcing the market’s reliance on flexible storage during periods of weather-driven demand spikes.

Natural gas prices responded quickly. U.S. futures climbed more than 3 percent to $3.85 per MMBtu after two volatile sessions, as traders weighed mixed weather forecasts against tightening weekly balances. Forecast models are pointing to colder-than-normal conditions in the eastern United States during the first week of February, followed by a moderation toward warmer temperatures across northern states later in the period. This uneven outlook has kept demand expectations in flux and price action unusually reactive.

Production trends added another layer of complexity. U.S. natural gas output rebounded to approximately 102.1 billion cubic feet per day midweek as supply recovered from storm-related disruptions that had temporarily knocked more than 15 percent of production offline. The rapid return of output helped limit broader supply concerns but did little to calm short-term volatility.

Although inventories remain above both last year and the five-year average, the latest withdrawal exceeded seasonal norms and reinforced the market’s sensitivity following a historic, weather-driven rally earlier this winter. Traders remain cautious as shifting forecasts, resilient production, and elevated storage levels compete to shape near-term price direction. With the next storage report due in early February, natural gas markets are likely to remain highly reactive as winter weather continues to dictate sentiment.