U.S. natural gas futures have pulled back sharply in recent sessions, even after the latest government data showed a triple-digit storage withdrawal. Prices moved lower as traders shifted focus away from storage and back toward weather forecasts and supply trends.

At this time, we advise investors to focus on stocks such as Coterra Energy ((CTRA Quick QuoteCTRA - Free Report) ), EQT Corporation ((EQT Quick QuoteEQT - Free Report) ) and Excelerate Energy ((EE Quick QuoteEE - Free Report) ), which are positioned to benefit from longer-term natural gas demand tied to infrastructure and exports.

Prices Slide as Weather Turns Milder

Natural gas prices struggled throughout the week, finishing near their lowest levels since late October. The front-month futures contract fell more than 3% over the week, settling just below $4 per million British thermal units. Early attempts to rebound faded quickly as updated forecasts showed warmer-than-normal temperatures lasting into early January. With less cold weather expected, traders scaled back expectations for heating demand, putting steady pressure on prices.

The market reaction highlighted how sensitive winter trading remains to short-term weather shifts. Even after a cold start to December, the lack of sustained freezing temperatures erased much of the earlier weather-driven premium.

Supply Strength Outweighs Storage Draw

The latest Energy Information Administration weekly report showed a large 167 billion cubic feet (Bcf) storage withdrawal. While the draw was well above normal for this time of the year, total inventories remained slightly above the five-year average, suggesting that supply is still adequate to meet demand.

At the same time, U.S. natural gas production continued to hover near record levels, averaging around 110 Bcf per day in December. This steady flow of supply has limited upside for prices, even as LNG exports provide a consistent baseline demand.

Overall market signals point to caution. Traders do not appear concerned about a late-winter storage shortfall, treating cold-weather price spikes as chances to sell rather than the start of a lasting rally. Unless forecasts turn much colder, an ample supply is expected to keep prices under pressure.

Looking Ahead With a Long-Term Lens

While near-term price action remains tied to weather and production, the longer-term outlook is more balanced. LNG exports, pipeline demand and global gas markets continue to provide structural support to U.S. natural gas over time.

Short-term volatility is likely to persist through the heart of winter, but investors with a longer horizon may find opportunity in companies linked to natural gas infrastructure and exports. At this time, we advise investors to focus on stocks such as Coterra Energy, EQT and Excelerate Energy, which remain well-positioned as natural gas demand continues to evolve beyond short-term weather swings.

3 Stocks to Focus on

Coterra Energy: It is an independent upstream operator primarily engaged in the exploration, development and production of natural gas. Headquartered in Houston, TX, the firm owns some 186,000 net acres in the gas-producing Marcellus Shale of the Appalachian Basin. The company’s share of natural gas in its overall production is more than 60%.

Coterra’s expected earnings per share growth rate for three to five years is currently 27.8%, which compares favorably with the industry's growth rate of 17.2%. Valued at over $19 billion, Coterra Energy — carrying a Zacks Rank #3 (Hold) — has a trailing four-quarter earnings surprise of roughly 6.6%, on average.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EQT: EQT is the premier natural gas producer in the domestic market based on average daily sales volumes. With a primary emphasis on the Appalachian Basin, spanning Ohio, Pennsylvania and West Virginia, the company’s share of natural gas in its overall production/sales is more than 90%.

EQT beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The Zacks #3 Ranked natural gas producer has a trailing four-quarter earnings surprise of roughly 16.7%, on average.

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 2025 earnings per share indicates 2.4% year-over-year growth. This #3 Ranked firm has a trailing four-quarter earnings surprise of roughly 26.7%, on average.