Natural Gas Prices Spike to Start 2025

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--With a new year and a new cold-weather pattern descending on parts of North America, U.S. natural gas prices were on the rise during the first full trading day of 2025.

Henry Hub, the U.S. benchmark for the price of natural gas, was up about 2.2% in early Thursday trading to move in the range of $3.70 per million British thermal units (MMBtu). The price has been on a steady increase since mid-December, when the price was closer to $2.70/MMBtu before winter weather descended on much of North America.

The end-of-year holidays were plagued by the second Alberta Clipper of the 2024-25 winter season, with heavy snow and rain in the Great Lakes region. Tornados in the U.S. south, meanwhile, left four people dead.

Arctic air behind the clipper system is now moving across the Canadian Rockies and into the upper U.S. Plains. On Thursday, the National Weather Service issued a cold-weather advisory for parts of central and northwest North Dakota due to expected wind chills as low as 32 degrees below zero Fahrenheit.

Farther east and parts of Michigan's Upper Peninsula were expecting as much as 12 inches of new snow.

Apart from the cold weather, natural gas prices were supported by what IIR Energy considered a sharp 2 billion cubic feet per day (Bcf/d) decline in domestic production to end 2024. The drop was in part due to maintenance at the Cheyenne Hub Compressor Station in Colorado, part of the Rockies Express pipeline.

Rockies Express runs some 1,700 miles from the U.S. Rocky Mountain range to Ohio. It's controlled by Rockies Express LLC. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Plant Database can click here for the profile.

Even with intermittent events such as plant maintenance and the weather, the U.S. Energy Information Administration (EIA) isn't expecting a slump in prices for 2025.

"Based on our expectation that the storage surplus to the five-year average will narrow over the winter, we forecast the U.S. benchmark Henry Hub spot price will increase from an average of just over $2 per million British thermal units (MMBtu) in November to an average of about $3 per MMBtu for the rest of the winter heating season," EIA said in its monthly report for December.

Overseas and the European economy is seeing a similar uptick in natural gas prices, but largely for different reasons. The Dutch Title Transfer Facility (TTF), a regional benchmark for the price of natural gas, was up as well, trading at around $14.87 per MMBtu for the February contract.

A five-year agreement on the transit of Russian natural gas through Ukraine ended with the new year. Flows continued even though war-related sanctions limited what was available. Sabotage on Russia's twin Nord Stream gas pipeline system in the Baltic Sea had sidelined some volumes during the ongoing conflict in Eastern Europe.

Citing Norwegian regulatory statements, meanwhile, Reuters reports Equinor's Hammerfest liquefied natural gas facility was offline due to a compressor failure. Along with the U.S., Norway has helped fill the Russian void in the European gas market.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).