Natural Gas Prices Dip as Warmer December Weather Forecasts Emerge

Weather Volatility and Price Reversal

Natural gas markets have been exceptionally volatile this month. Henry Hub prompt-month futures reached $5.29 on December 5 amid a brief cold snap, the highest price in two years. However, as weather models for late December flipped to a warmer trend, prices plummeted back below $4.00. The U.S. Energy Information Administration (EIA) has maintained a winter spot price forecast of around $4.30, but traders are currently pricing in a less severe end to the year.

Export Capacity and 2026 Outlook

While domestic weather is currently bearish, the long-term outlook for natural gas is supported by growing LNG export capacity. U.S. natural gas prices are beginning to feel market tightness due to this expansion, and analysts expect prices in 2026 and 2027 to be structurally higher than in 2025. However, for the immediate term, regional supply availability and the lack of a sustained freeze are keeping a lid on price spikes.