In a dramatic reversal of market expectations, U.S. natural gas futures recently soared above $6 per million British thermal units (MMBtu) for the first time since 2022, after a powerful Arctic blast hit major parts of the country. This rally stands in stark contrast to the Energy Information Administration’s (EIA) January Short-Term Energy Outlook, which had initially predicted a mild winter and lowered price forecasts to an average of $3.38/MMBtu for the first quarter of 2026.
This unexpected price surge is poised to significantly boost the profitability of exploration and production companies operating in the natural gas industry. Consequently, diversified Energy exchange-traded funds (ETFs) that hold these companies are positioned to capture this windfall, offering investors a strategic avenue to gain exposure to the industry’s rally while managing company-specific risks.
Before suggesting such energy ETFs that will gain from this natural gas price rally and thus warrant a place in your watchlist, let us analyze what led to this surprise price hike and how energy ETFs might be the most strategic choice for your portfolio.
The recent price surge in U.S. natural gas is primarily a story of intense, weather-driven demand colliding with constrained supply. A powerful Arctic front triggered severe winter weather, drastically increasing the need for residential and commercial heating. This meteorological event is not just a cold snap; nearly half of all U.S. states declared emergencies due to the extreme conditions.
On the supply side, the storm has directly impacted energy infrastructure. Data indicate that U.S. natural gas production fell more than 11 billion cubic feet per day over a five-day period due to disruptions in operations. Furthermore, deliveries to key liquefied natural gas (LNG) export terminals fell significantly, further tightening the supply. While overall U.S. gas storage was robust before the storm — about 6% above the five-year average — the immediate, intense draw on supplies to meet heating demand created a short-term market squeeze.
U.S. Natural gas futures jumped more than 119% over the five days through Jan. 26, 2026 — the largest increase on record since 1990 (as per a Bloomberg press release).
This dynamic translates directly into stronger revenues and sturdier profits for major natural gas producers and operators. Leading producers like EQT Corporation EQT, Expand Energy EXE and Coterra Energy CTRA are positioned to benefit from the higher realized prices for their output.
