Even as gasoline prices drop below $3 a gallon in parts of the country, the opposite is happening in another corner of the energy market. Natural gas prices are surging just as millions of Americans brace for winter.
Natural gas prices rising in 2025
CNN reports that natural gas futures have jumped by nearly 40% since the end of September. They’re now at their highest level since December of 2022.
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Because natural gas is the primary heating source for most U.S. households, the spike is likely to be felt directly on utility bills.
Energy analyst Andy Lipow warns that, “All that money the consumer is saving on gasoline may be eaten up by the soaring price of natural gas.”
Even with a brief 13% decline on Friday, natural gas prices remain almost 50% higher than in December of 2024.
The U.S. Energy Information Administration (EIA) has now revised its winter forecast upward.
Winter outlook on gas bills
In its latest forecast, the EIA expects natural gas prices to average $4.30 per million British thermal units (BTU) between November and March. That’s more than 40 cents higher than previously projected. The agency says the adjustment is driven by December’s colder-than-expected weather, “in which we expect will increase space heating demand.”
For 2025 overall, the EIA expects average prices of $3.56 per million BTU, up sharply from $2.19 in 2024. Prices are projected to rise again in 2026.
As a result, the average home heating bill is expected to increase about 3% this winter.
Which regions will feel it most?
CNN says the biggest price jumps will take place in the Northeast and Midwest. Meanwhile, costs are expected to fall in the South and remain flat in the West.
Ripple effects in electricity
Because natural gas fuels roughly 40% of U.S. electricity production, rising natural gas prices will also push electricity bills higher. Electric rates were already up 7.4% nationally from September of 2024 to September of 2025.
The surge has even become a campaign issue in states like Virginia and New Jersey, where electricity prices have risen dramatically — up 21% in New Jersey this year alone.
Why natural gas prices are climbing
Analysts point to several key factors:
- Producers are reluctant to boost output, wary of triggering a supply glut.
- Oil drilling has slowed in the industry, reducing the natural gas produced as a byproduct.
- Growing U.S. LNG exports are tightening domestic supply, as American companies ship liquified natural gas to overseas buyers – particularly in Europe, where nations continue to reduce reliance on Russian energy.
