As 2025 comes to a close, the weather is once again driving short-term moves in natural gas prices. Shifting forecasts in recent weeks have pushed traders to focus more on temperature outlooks, shaping expectations for early January. The commodity has already delivered a strong year, rising more than 20% so far, reflecting tighter balances and growing demand.

With heating demand back in the spotlight, investors are taking a fresh look at how supply, exports, and storage balance out. During the Christmas holiday week, natural gas posted a sharp rebound, climbing roughly 10% and finishing just under the mid-$4.30s per million British thermal units. In this setup, companies like The Williams Companies ((WMB Quick QuoteWMB - Free Report) ), Cheniere Energy ((LNG Quick QuoteLNG - Free Report) ), and Excelerate Energy ((EE Quick QuoteEE - Free Report) ) stand out for their exposure to long-term natural gas demand.

Late-December Rebound Sets the Floor

Natural gas prices stabilized during the week following a sharp two-week slide, with front-month futures finding support as colder weather risks resurfaced. After selling pressure dominated earlier in December, the market shifted into consolidation mode, allowing prices to recover modestly by week’s end. While the weekly performance did not signal a breakout, it did mark a pause in the prior downtrend. The bounce was driven mainly by traders closing short positions and reacting to changing weather forecasts, not by any real change in supply fundamentals. Still, prices ended the week slightly higher, suggesting the recent downward pressure is starting to ease as January begins.

Weather Regains Influence Over Near-Term Demand

Updated forecasts for early January are pointing to colder weather, which is lifting expected heating demand even though temperatures are still not unusually cold for the season. Heating trends are now driving prices more than broader economic factors. Small changes in forecasts are causing big price moves, showing how sensitive the market is. While a prolonged cold spell has not arrived yet, the cooler shift alone has been enough to improve sentiment. For now, weather is once again the key driver of short-term natural gas prices as traders look for clearer signals in January.

LNG Exports and Storage Keep Volatility Alive

Domestic gas demand is expected to rise in early January as colder weather boosts home heating use and LNG facilities continue running near full levels. Exports now play a steady role in supporting demand, especially during cold spells. At the same time, U.S. production remains near record highs, which limits strong price moves. Storage withdrawals are close to normal levels, leaving supplies comfortable but not loose. This balance makes prices very sensitive to small changes in weather, exports, or output.

Constructive Signals for January Watchers

As January approaches, natural gas prices are being shaped by a mix of supportive, but not overpowering, factors. Colder weather is lifting demand, LNG exports remain steady, and storage levels look balanced. Together, these limit major downside risk while leaving room for gains if colder trends deepen. Volatility should continue, but the lack of heavy oversupply adds a layer of stability.

For investors focused on natural gas, the setup is cautiously positive. LNG exports continue to provide steady support, while weather remains the main short-term driver of prices. Staying invested in companies tied to gas infrastructure and LNG flows — such as The Williams Companies, Cheniere Energy, and Excelerate Energy — can help keep exposure aligned with the market’s most stable demand trends as January progresses.

3 Stocks to Focus on

The Williams Companies: With U.S. natural gas demand projected to grow significantly in the long term, The Williams Companies - carrying a Zacks Rank #3 (Hold) - seems to be well-positioned to capitalize on the same, owing to its impressive portfolio of large-scale value-creating projects. With its extensive network handling a third of the U.S. natural gas and significant expansion projects in the pipeline, Williams is set to benefit from favorable industry dynamics and growth prospects.

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

The Zacks Consensus Estimate for the company’s 2025 earnings per share indicates 9.9% year-over-year growth. Williams Companies’ expected EPS growth rate for three to five years is currently 17.6%, which compares favorably with the industry's growth rate of 10.9%.

Cheniere Energy: Cheniere Energy holds a clear competitive edge as the first company to receive regulatory approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal. Strong operations and long-term contracts position the company for substantial growth in both revenues and earnings.

Backed by firm gas supply agreements for its Sabine Pass and Corpus Christi facilities, the Zacks Rank #3 company enjoys strong cash flow visibility and solid long-term growth prospects. Notably, over the past 60 days, the Zacks Consensus Estimate for Cheniere Energy’s 2025 earnings has moved up 26.4%.

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.