Does the Record Gas Draw Support a Bullish Case for Investors?

Natural gas markets delivered another volatile week as lingering cold weather effects clashed with shifting forecasts. The key question for investors is whether the historic storage draw meaningfully changes the outlook for natural gas exposure.

At this time, we advise investors to focus on stocks, such as Expand Energy EXE, Antero Resources (AR) and Excelerate Energy EEAR, which are closely tied to U.S. natural gas fundamentals and infrastructure.

Weekly Price Action Reflects Volatility, Not Breakdown

Natural gas prices remained volatile throughout the week following the sharp weather-driven rally seen in late January. Futures had surged to a three-year high on Jan. 28, hitting $7.460 per MMBtu, as Winter Storm Fern triggered extreme heating demand and widespread production freeze-offs. Since then, prices have pulled back as forecasts turned milder across parts of the country. Despite several intraday rebounds, natural gas ended the week sharply lower from its late-January peak. Settling at $3.422 per MMBtu, the commodity reflected how quickly sentiment can shift when weather expectations change. Still, price weakness occurred alongside tightening inventories rather than a collapse in demand fundamentals.

A Tighter Balance Offers Fundamental Support

The Energy Information Administration (“EIA”) reported a record 360 billion cubic feet (Bcf) withdrawal from U.S. natural gas storage for the week ended Jan. 30, the largest weekly draw ever recorded and well above the five-year average of 190 Bcf. This single report flipped inventories from a surplus to a slight deficit versus seasonal norms. With working gas stocks now below the five-year average, the market has far less margin for error should colder-than-expected weather return later in winter. Historically, such tightening tends to increase price sensitivity and support risk premiums.

Production Recovery Tempers the Upside

At the same time, the positive storage data is being offset by a stronger supply. Gas production that was disrupted by freeze-offs has mostly recovered, with lower-48 output back near record levels. Gas rig counts are also rising, signaling continued production growth. While the EIA has reduced its long-term production outlook, near-term supply recovery is still a key factor that could limit price gains unless demand increases again.

Conclusion: Volatility Remains, But the Setup Is Improving

Natural gas prices are likely to remain volatile through the remainder of winter, driven by rapid changes in weather forecasts and daily balances. However, the record storage draw meaningfully altered the market’s starting point. Inventories are no longer comfortably above normal, increasing sensitivity to any renewed cold.

For investors, this shift improves the medium-term outlook even if near-term price swings persist. Strong power generation demand, steady LNG export flows, and tighter inventories collectively support a more constructive view. At this time, we advise investors to focus on stocks such as Expand Energy, Antero Resources and Excelerate Energy, which are well-positioned to benefit if tighter balances continue to support natural gas fundamentals.

3 Natural Gas Stocks to Focus On

Expand Energy: Expand Energy has emerged as the largest natural gas producer in the United States after completing the Chesapeake–Southwestern merger. With a strong footprint in the Haynesville and Marcellus basins, the Zacks Rank #3 (Hold) company is well positioned to benefit from rising natural gas demand fueled by LNG exports, growing AI and data-center power needs, EV adoption, and broader electrification trends. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Expand Energy’s 2026 earnings per share indicates a 29.5% year-over-year improvement. The firm has a trailing four-quarter earnings surprise of roughly 4.9%, on average.

Antero Resources: It is an independent energy producer focused on natural gas and liquids in the Appalachian Basin. Headquartered in Denver, this Zacks #3 Ranked company develops low-cost assets in the Marcellus and Utica shales, holding about 515,000 net acres. Antero Resources’ production mix is weighted toward natural gas and NGLs, with minimal oil exposure. AR is also one of the largest U.S. suppliers of natural gas and LPG to export markets.

Antero Resources is supported by its midstream affiliate, Antero Midstream, in which it owns roughly 29%. This integrated setup secures transportation and market access from Appalachia to the Gulf Coast. A low debt profile and steady drilling results provide flexibility and support long-term growth. The Zacks Consensus Estimate for Antero Resources’ 2026 earnings per share indicates a 78.3% year-over-year surge.

Excelerate Energy: Headquartered in The Woodlands, TX, the company focuses on LNG infrastructure and services, particularly Floating Storage Regasification Units (FSRUs) and associated terminals. Operating across both emerging and developed markets, Excelerate Energy accounts for about 20% of the global FSRU fleet and 5% of total regasification capacity. Established in 2003, the company is now expanding into LNG-to-power and gas distribution, offering reliable and flexible energy solutions worldwide.

The Zacks Consensus Estimate for Excelerate Energy’s 2026 earnings per share indicates 32.2% year-over-year growth. This firm — currently carrying a Zacks Rank of 3 — has a trailing four-quarter earnings surprise of roughly 26.7%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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