Natural Gas Soars on Major Cold Shift; Oil Resilient Amid Greenland Tensions

Crude prices rise despite mounting US–EU tensions

• The WTI prompt-month contract rose $0.53 to $59.97/Bbl on Tuesday morning (7:45 AM CT)
• President Trump criticized European allies on social media, while EU leaders signaled a firm response to potential US tariffs tied to the semi-autonomous territory of Denmark
• • Trump announced a 10% tariff on goods from eight European countries beginning February 1, increasing to 25% in June unless a deal is reached for the “purchase of Greenland”
  • EU leaders are expected to hold an emergency meeting to consider retaliatory measures, including reinstating duties on US goods
• The escalation has pressured equities as the risk of a US–EU trade dispute raises concerns over global growth, though the impact on crude prices has been limited
• The broader oversupply backdrop remains intact, with the EIA forecasting implied stock builds averaging roughly 2.8 MMBbl/d in 2026
• Supply disruptions have provided some near-term support, as Kazakhstan’s largest oil producer halted production at two major fields following fires at power generation facilities
• • Kazakhstan had already reduced output after drone strikes disrupted the Caspian Pipeline Consortium’s export terminal in Russia, which handles roughly 80% of Kazakh crude exports
  • CPC loadings, which reached as high as 1.7 MMBbl/d at times last year, are expected to average 800–900 MBbl/d in January

February gas surges more than 80c on significant weather shift

• The February Henry Hub contract is trading higher by 83c, with the contract near $$3.95/MMbtu (8:00 AM)
• Prices for the next few seasons are also higher, with the Summer ’26 seasonal strip up 14c to $3.44/MMbtu and Winter ‘26/’27 up 6c to $4.08/MMbtu
• Dry gas production has faded to 107.73 Bcf/d, according to data from S&P

Weather forecasts turn colder

• The Euro Ensemble weather model gained more than 50 heating degree days compared to Friday, with Lower-48 temperatures now forecast to be well below the ten-year average for the next two weeks
• This week, population-weighted average temperatures are expected to fall to 25 ºF, compared to the ten-year average of about 42 ºF
• This should result in a significant jump in gas demand and much larger withdrawals from storage
• Heavy snow and winter weather conditions are currently impacting much of the eastern US