The Disconnect Between LNG Exports and Natural Gas Price Weakness in Early 2026

While liquefied natural gas (“LNG”) demand reaches structural highs, natural gas prices are surprisingly struggling to gain traction. The culprit? A combination of mild winter conditions, lighter-than-expected inventory drawdowns, and robust domestic production levels are keeping a lid on near-term value. For investors seeking exposure, natural gas stocks like EQT Corporation EQT, Expand Energy EXE, and Coterra Energy CTRA offer more compelling opportunities than chasing daily price movements, as these producers remain anchored to longer-term structural demand patterns.

Mild Weather Dominates Market Action Despite Export Records

The benchmark U.S. natural gas contract closed last week at $3.618 per million British thermal units, marking a weekly decline after struggling to sustain momentum above the $4 level. Warmer-than-normal temperature projections across much of the Lower 48 have dampened expectations for winter heating consumption. Adding to the bearish backdrop, the most recent storage withdrawal came in at 38 billion cubic feet—materially below consensus forecasts—suggesting inventory is not tightening as quickly as the market had anticipated. Record-level U.S. production continues to weigh on upside potential, even as LNG terminals maintain historically elevated export volumes throughout the December period.

Record LNG Flows Haven’t Been Enough to Support Prices

The contradiction at the heart of today’s market is striking: U.S. LNG export capacity is running near all-time highs, with average feedgas flows to major terminals hitting new records in December. This robust overseas demand should theoretically provide price support. However, the market remains laser-focused on immediate weather signals during peak winter demand season. When forecasts turn mild and production surges, even strong export activity struggles to offset the downward pressure from domestic supply dynamics. While LNG demand has cushioned what could otherwise be a steeper decline, it hasn’t been potent enough to drive prices higher given the softer near-term backdrop.

Near-Term Catalysts vs. Structural Opportunity

The path forward for natural gas hinges on two competing dynamics. In the short run, incoming weather data and weekly storage reports will dictate price direction—a shift toward cold snaps could tighten the supply-demand equation, while persistent warmth would keep withdrawals modest and prices under pressure. This explains recent choppiness in the market.

Beyond these fluctuations, however, the fundamental picture remains supportive for patient investors. Growing LNG export infrastructure represents a durable demand anchor that transcends seasonal weather noise. As winter progresses and cold eventually arrives, supply draws could intensify. From a portfolio construction perspective, temporary weakness driven by weather can present attractive entry opportunities, particularly in producers with proven scale and operational efficiency.

Three Natural Gas Producers Worth Considering

EQT Corporation stands out as the nation’s leading natural gas producer by average daily sales volume. Concentrated in the Appalachian Basin (Ohio, Pennsylvania, and West Virginia), natural gas comprises over 90% of the company’s production mix. EQT has delivered earnings surprises above the Zacks Consensus Estimate for four consecutive quarters, with an average trailing four-quarter beat of approximately 16.7%. The stock carries a Zacks Rank of 3 (Hold).

Expand Energy has emerged as America’s largest natural gas producer following the Chesapeake-Southwestern combination. The company’s major positions in the Haynesville and Marcellus basins position it to capitalize on tailwinds from LNG exports, data center power demands, electric vehicle deployment, and grid electrification initiatives. Zacks consensus forecasts suggest 2025 earnings per share could surge 317.7% year-over-year, though the company’s trailing four-quarter earnings surprise averages around 4.9%.

Coterra Energy, an independent operator headquartered in Houston, focuses on natural gas exploration and production across approximately 186,000 net acres in the Marcellus Shale formation. Natural gas represents over 60% of its production portfolio. With an anticipated three-to-five-year earnings growth rate of 27.8%—above the 17.2% industry average—Coterra has carved out a strong fundamental position. The firm, valued above $20 billion and ranked 3 by Zacks, averages a trailing four-quarter earnings surprise of roughly 6.6%.

The Investment Takeaway

The near-term weakness in natural gas prices amid strong LNG fundamentals creates a potential disconnect that astute investors can exploit. By focusing on high-quality producers with established scale and competitive advantages, investors can sidestep daily weather volatility while positioning for the longer-term structural demand drivers reshaping global energy markets.