On Monday, the price of Henry Hub Natural Gas Futures in the USA surged due to a colder weather outlook in January, which increased the demand prospects for this fuel used in heating and power generation.

The price of natural gas for delivery in New York in February rose 16% on Monday, closing at $3.936 per million British thermal units, marking the largest one-day increase for this contract since it began trading in 2012. During the trading period, the most active natural gas contract briefly climbed to a two-year high, with an increase of up to 24%.

The National Weather Service in the USA forecasted in its latest 8-14 day weather outlook that there would be a higher likelihood of colder weather in the eastern and midwestern parts of the USA. This would suddenly alter the generally mild autumn and early winter weather that the USA has experienced so far.

From Texas to Michigan and Georgia, forecasts across the USA indicate a significant cold snap early next month. According to NatGasWeather.com, this change is driving bullish sentiment in Energy demand, which was already expected to surge during the winter.

Dennis Kissler, an Energy trader and Analyst at BOK Financial, wrote in a report on Monday that the cold outlook is "stirring a buying frenzy."

Due to ample domestic Shale Gas production in the USA, near-term natural gas futures prices have largely remained below $3 for most of the year.

However, according to the trading analysis firm Analytix.AI, the upcoming cold snap could freeze some wellheads, potentially suppressing some natural gas output, particularly in certain areas of the Marcellus Shale of Appalachia.

Stephen Roseme, the Managing Director of Bridgeton Research Group LLC, stated that funds relying on algorithmic trading strategies have also shifted their risk position from neutral to net long.

The increased demand for liquefied natural gas exports from the Gulf of Mexico is expected to boost overall demand in the near future, including the expansion of the Corpus Christi LNG plant by Cheniere Energy and the second plant Plaquemines LNG by Venture Global LNG.

With a lukewarm demand outlook, the tightness in the natural gas market may stimulate short-term oil consumption.

Supported by technical factors and rising natural gas prices, WTI Crude Oil closed around $71, marking its highest closing price in two weeks. WTI Crude Oil prices remained above the 100-day moving average, a key technical level that encouraged more Bids. Data from Bridgeton Research Group showed that algorithmic traders shifted to a net long position in Brent Crude Oil on Monday, having held a short position since mid-October.

Bart Melek, head of Global CSI Commodity Equity Index strategy at TD Securities, said, "Cold weather and geopolitical risks have led free traders to go long, while higher prices have attracted trend followers."

Nevertheless, Crude Oil remains in a volatile Range, impacted by concerns over a supply surplus in 2025 and ongoing geopolitical conflicts in the Middle East. Traders are also waiting for Trump's inauguration in January to see how the incoming government will affect Crude Oil supply and demand.