NEW YORK, Feb 17, 2026, 12:44 (EST) — Regular session
- U.S. natural gas futures dropped almost 6% with traders eyeing milder weather outlooks and a sturdier supply picture.
- Morgan Stanley pointed to a February dip, citing softer heating demand alongside a recovery in Lower 48 production.
- Traders now look ahead to Thursday’s U.S. storage numbers, watching closely for any hints of tightening from LNG demand.
Natural gas futures in the U.S. slipped Tuesday, edging closer to $3, with traders reacting to forecasts for less severe weather and signs of supply coming back. The March Henry Hub contract dropped 18.7 cents, or 5.77%, landing at $3.056 per million British thermal units (mmBtu). 1
Natural gas prices have slumped nearly 29% so far this February as milder weather sets in, Morgan Stanley noted. Heating degree days—a gauge of cold that reflects heating demand—are tracking about 9% under the 10-year norm. The bank flagged Lower 48 dry gas output at roughly 107.9 bcf/d for the month to date. Haynesville’s rig count has climbed by 10 since last month, now totaling 52. Morgan Stanley still projects around 3.8 bcf/d of LNG growth in 2026, with Golden Pass expected to kick off in early March. 2
The basic question now is whether winter demand has wrapped up or just paused. At about $3, producers see hedging equations shift fast, and power plants start getting a new read on fuel needs as shoulder season approaches.
EBW Analytics Group’s Eli Rubin flagged rising “bearish” NYMEX gas risks heading into Spring, after the long holiday weekend delivered a “net weather demand loss” and technicals suggested further declines. PRICE Futures Group’s Phil Flynn blamed “Spring fever” for the drop, citing melted snowpack and temperatures staying above normal, both of which are cutting into heating demand. 3
Supply’s quietly expanding, too. The Energy Information Administration, in its February outlook, sees U.S. marketed natural gas output hitting an all-time high—120.8 billion cubic feet per day—in 2026. That climbs again to 122.3 bcfd for 2027, with the bulk coming out of the Permian, Appalachia, and Haynesville, according to the forecast. 4
The trade isn’t locked in yet. A late-February or early-March cold snap—or even a production freeze-off—could shift balances quickly, particularly with LNG export demand holding steady.
Storage is the next focus. The EIA’s weekly U.S. natural gas storage numbers drop Feb. 19, giving traders a sharper look at winter’s ongoing pressure on inventories. 5
Then it’s straight back to tracking weather models, daily production, and LNG feedgas flows—the core signals steering this market long before the numbers actually hit the page.
