Why U.S. natural gas prices rose after a record low

After hitting historic lows in 2024, U.S. natural gas prices rebounded strongly in 2025. 

For many readers, this sudden shift raises a simple question: what changed so quickly in a market known for oversupply? 

The answer lies in the interaction between weather, production, infrastructure, and global demand.

Henry Hub sets the national tone

In 2025, the U.S. wholesale spot price of natural gas at Henry Hub, the country’s main pricing benchmark, averaged $3.52 per MMBtu, according to LSEG data. 

That represents a 56% increase compared to 2024, which, after adjusting for inflation, was the lowest annual average ever recorded. 

Daily prices fluctuated between $2.65 and $9.86 per MMBtu, a wide range, but still narrower than the volatility seen the year before.

Winter demand and weather shocks

Seasonality played a central role in shaping prices. 

Natural gas prices typically rise in winter, when colder temperatures increase demand for heating and electricity generation. 

Because natural gas is the dominant fuel for U.S. power generation, cold weather amplifies demand. In late 2025, a polar vortex in late November and early December briefly pushed prices above $5.00/MMBtu, underscoring how sensitive the market remains to extreme weather events.

LNG exports tighten the balance

Another major driver was the global pull on U.S. supply. 

Demand for U.S. liquefied natural gas (LNG) exports increased by roughly 3 billion cubic feet per day in 2025 as new export capacity came online. 

More gas flowing overseas reduced domestic slack, making prices more responsive to shifts in weather and consumption.

Why U.S. natural gas prices rose after a record low

Summer softness despite record production

Prices did not rise evenly throughout the year. During the summer months, record U.S. production growth, about 4.5 Bcf/d, combined with lower power-sector demand weighed on prices. 

In other words, the U.S. produced more gas than it needed during mild weather, temporarily easing upward pressure.

Regional differences tell different stories

While most major U.S. trading hubs saw higher prices in 2025, the increase was not universal. 

Regional supply conditions and infrastructure constraints created sharp contrasts across the country.

Why the Northwest moved against the trend

In the Pacific Northwest, prices at Northwest Sumas actually fell by $0.24/MMBtu in 2025. 

Abundant Canadian supply and weaker demand for gas-fired electricity weighed on prices. 

Natural gas production in western Canada reached record highs, led by the Montney Shale Basin in British Columbia and Alberta.

Pipeline constraints drive Northeast price spikes

The Northeast experienced the opposite dynamic. 

Prices at Transco Zone 6 NY and Algonquin Citygate surged early in 2025 as cold weather collided with limited pipeline capacity. 

Algonquin Citygate prices averaged $16.37/MMBtu in January and $14.00/MMBtu in February, the highest winter levels since 2022. 

In this region, winter demand often overwhelms pipeline infrastructure, making prices far more volatile than national averages.

Why this matters for energy markets

The 2025 rebound does not signal a supply crisis, but it does reflect a more complex pricing environment. 

Weather extremes, expanding LNG exports, and regional infrastructure bottlenecks now play a larger role in shaping U.S. natural gas prices. 

For consumers, utilities, and energy-linked industries, understanding these forces is critical, because future price moves will depend less on a single factor and more on how all of them collide at once.