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Natural Gas Retreats After Weather-Driven Spike; Crude Supported by Storm Impacts and Iran Risk

Crude rises as winter storm hits the US

  • The WTI prompt-month contract rose $0.95 to $61.58/Bbl on Tuesday morning (7:45 AM CT)
  • The freeze has disrupted refinery activity along the Texas Gulf Coast reducing near-term domestic demand
  • The storm has also affected domestic production around the country
    • According to North Dakota Pipeline Authority, between 80 – 110 MBbl/d of state production was offline Monday
    • Other analysts at TP ICAP Group, suggest crude production in the southern central US is down 1 MMBbl/d
  • On Tuesday, President Trump reiterated the US was sending a naval fleet towards the Middle East, raising the prospect of a potential escalation with Iran

Crude tanker rates surged to multi-year highs in late 2025 (EIA)

  • VLCC and Suezmax rates jumped as strong East Asian demand, higher OPEC output, and sanctions-driven trade rerouting tightened vessel availability and lengthened voyage distances
  • VLCC rates rose 118–139% YoY on key Persian Gulf routes, while Suezmax rates increased more than 100% on USGC and Black Sea routes
  • Rates declined in early 2026 on seasonal demand softening, though Suezmax freight remains near multi-year highs

February natural gas rally cools off, sliding more than 70c today (8:30 AM)

  • After surging to a high price of $7.44/MMbtu yesterday, February gas traded lower into the close
  • The more actively traded March contract dropped 15c to $3.75/MMbtu
  • Freezing weather has put a strain on electricity grids
    • PJM Interconnection LLC declared a level-1 emergency, and is requiring that every plant in the New Jersey - Chicago region run at full capacity
    • The Energy Department has authorized the grid to divert power from data centers and factories to prioritize hospitals and households
  • Natural gas production fell to a low of 97.2 Bcf/d as freeze-offs continue to weigh on supply

LNG feedgas demand falls to one-year low

  • Inflows to US export plants fell to 11.42 Bcf/d last weekend, but have recovered slightly to 14 Bcf/d this morning
  • This compares to highs of more than 20 Bcf/d seen earlier this month
  • US LNG imports have jumped
    • The Elba LNG export plant also has import capability and has been sending gas back into the US pipeline system, while the Everitt import terminal in Boston recently received a cargo from Trinidad
    • Typically, the US will only import LNG cargoes at times of extreme demand, usually in the Northeast

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