Strong El Niño could weigh on US winter gas demand, prices

US natural gas prices could face headwinds this winter from milder weather and weaker heating demand as a potentially historic El Nino reshapes North American weather patterns.

According to a winter 2026-2027 forecast released Oct. 7 by AccuWeather, temperatures across the Great Lakes, Ohio Valley and the Northeast will likely trend warmer this winter compared with last.

The largest declines in weather-related heating demand are expected across the Upper Midwest in Minnesota, Wisconsin and Michigan, where temperatures in December, January and February could trend more than 3 degrees Fahrenheit above normal, AccuWeather said.

"This has the potential to be the strongest El Niño on record," AccuWeather long-range expert Paul Pastelok said in a story published to AccuWeather's website. According to Pastelok, the current El Niño is "almost certain to surpass the powerful El Niño events of 1982-1983 and 1997-1998."

During an El Niño event, warmer-than-normal ocean surface temperatures emerge along the west coast of the Americas, according to the US National Oceanic and Atmospheric Administration.

"The warmer waters cause the Pacific jet stream to move south of its neutral position. With this shift, areas in the northern US and Canada are drier and warmer than usual. But in the US Gulf Coast and Southeast, these periods are wetter than usual," according to the agency's website.

US winter 2026-2027 market

Historically, about two-thirds of US residential-commercial heating demand in winter comes from states across the Northeast and the Upper Midwest, which includes gas demand from homes and businesses in Illinois, Indiana, Iowa, Minnesota, Michigan, Missouri and Wisconsin.

Last winter, US residential-commercial gas demand averaged about 44.9 billion cubic feet/day from December through February. Of that total, about 17.5 Bcf/d was attributable to demand from the Northeast, while about 12.5 Bcf/d was attributable to the Upper Midwest. Combined, the two regions accounted for nearly 67% of the US total, according to data from S&P Global Energy CERA.

Last winter, the Upper Midwest population-weighted temperature averaged about 25 F from December through February, which was about 5 degrees below average. By comparison, in winter 2023-2024, the regional population-weighted temperatures averaged about 34.9 F, which at the time was nearly 7 degrees above average. The impact of milder weather that year was considerable. During the three months, Midwest residential-commercial demand averaged just over 10.1 Bcf/d.

If a strong El Niño brings milder weather to the Upper Midwest and the Northeast this winter, gas prices could face pressure from both weaker heating demand and a reduced call on storage.

The strengthening El Niño forecast comes as winter gas prices have softened in recent months.

In the second quarter, the NYMEX Henry Hub January 2027 futures contract averaged over $4.55/million British thermal units. As recently as July, the contract was still trading around $4.25/MMBtu. Month to date, though, January futures have weakened to an average $3.76/MMBtu, data from CME Group and Platts showed. Platts is part of S&P Global Energy.