Forecasts for an unusually cold December have pushed natural gas prices sharply higher. Futures for January delivery briefly topped $5/MMBtu in early December, the first time since late 2022. The jump reflects strong demand for heating and power as winter weather sets in, combined with tight supplies and growing U.S. LNG exports.

A polar vortex brought freezing temperatures and snowstorms to the U.S. Midwest recently, while liquefied natural gas (LNG) exports continue to hit record highs as new facilities ramp up operations. Rising natural gas prices make gas-fired power generation increasingly costly for electric utilities, prompting some to shift toward cheaper coal to manage fuel expenses.