Natural Gas Price Forecast: NG=F Hits $4.11 As Warm Winter Outlook Puts $3.913 Support At Risk

Natural Gas (NG=F) Price Reset And Trading Context

Warm December Selloff And Erased November Rally

January Henry Hub Natural Gas (NG=F) futures have wiped out the entire November advance in one week. The front month settled around $4.113 per MMBtu after a weekly loss of about $1.176, a drop of 22.23%. Intra-day trade pushed to a low near $4.065, only a few ticks above the late-October trough at $4.052. The market had just broken above $5 on a cold-weather spike. That move reversed fast once December 16–25 forecasts flipped to seasonal or mild across key U.S. demand corridors. Longs built on a “prolonged cold” scenario were forced to exit as bids disappeared and volatility jumped.

Storage: -177 Bcf Draw Versus 2.8% Above Seasonal Norms

Storage data looked bullish at first glance but did not change the trend. The EIA reported a -177 Bcf withdrawal for the week ended December 5. That draw beat analyst expectations near -166 Bcf. It was also larger than the -167 Bcf withdrawal in the same week last year and well above the five-year average of about -89 Bcf. The move cut the storage surplus by roughly 46% in a single week. Even after that, inventories remain around 3% above typical seasonal levels. Traders treated the print as strong but not decisive. With forward weather turning warmer and the structural surplus intact, the market faded the report instead of bidding Natural Gas higher.

Production: 112.5 Bcf Per Day And Near-Record Output

Supply remains the main bearish anchor for NG=F. U.S. dry gas production reached about 112.5 Bcf per day, up 7.1% year-on-year. Average Lower-48 output so far in December sits near 109.7 Bcf per day, nudging above November’s record 109.6 Bcf per day. The gas rig count slipped by only two units to 127, still just under a 2.25-year high. The EIA’s 2025 projection calls for average dry gas production around 107.74 Bcf per day. The message is simple. Output is running at or near all-time highs into a mild winter window. There is no meaningful supply-side cut to support prices. Any bull case has to fight this level of production.

Demand: From 142.3 Bcf Per Day To 126.3 Bcf Per Day

Short-term demand projections moved sharply lower alongside the weather shift. For the current week, total U.S. gas demand including exports is estimated around 142.3 Bcf per day. Next week that figure is projected to fall to about 126.3 Bcf per day. That is a drop of roughly 16 Bcf per day in a single week. Residential and commercial heating loads are the swing factor. Warmer December conditions reduce space-heating needs precisely when traders were positioned for extended cold. Power sector demand has been firm and LNG exports remain elevated, but both are insufficient to offset the drop in heating consumption. With demand easing and supply heavy, Natural Gas (NG=F) has little fundamental support at current price levels.

LNG Exports And Global Balances

U.S. LNG remains a structural pillar for Natural Gas, but not a short-term rescue. Average flows to the eight large U.S. LNG export terminals are running near 18.1–18.8 Bcf per day. That is up from a record 18.3 Bcf per day in November. Exports are strong and steady, yet balances remain comfortable. European storage sits around 71% of capacity versus a five-year average near 81%. Asia is dealing with mild conditions and ample supply. Spot LNG prices in the region have dropped to a roughly 20-month low. Those signals confirm that global gas is not under acute stress. International demand is robust enough to absorb U.S. molecules but not tight enough to justify a sustained winter risk premium for NG=F while the weather stays mild.

Technical Structure: Broken Trend And $3.913 Back In Focus

Technically, the damage on Natural Gas (NG=F) is clear. The January contract posted a 22.23% weekly decline and lost key supports in one move. Price broke below the 52-week moving average around $4.953 and the 50% retracement zone near $4.705. The breakdown turned the prior breakout above $5 into a classic bull trap. The October 29 low at $4.052 is now under constant pressure. The next clear downside level is the October bottom near $3.913. Once the market lost the moving averages, stop orders and algorithmic selling accelerated the slide. The trend that carried NG=F higher through November is now invalid. Short-term price action is guided by momentum, forced liquidation, and opportunistic short entries, not by a stable uptrend.

Weather Models Versus Storage Prints

Recent trade shows how weather dominates Natural Gas pricing. A single large storage draw did not stop a 22% weekly collapse. The driver was the December 16–25 forecast turning warmer. Traders had built long positions around expectations of sustained cold and repeated draws of similar size. When models shifted, that thesis failed. The market repriced the entire November rally in a few sessions. Storage remains important for the seasonal balance, but futures are reacting more to forward-looking weather than to backward-looking inventory data. Without a clear shift back to below-normal temperatures, even strong draws risk being ignored or sold into.

Positioning, Sentiment And Volatility In NG=F

The current tape in NG=F is a positioning story as much as a fundamentals story. November’s rally and the breakout above $5 attracted weather bulls, trend followers, and short-covering. The weekly fall of 22.23% reflects that those same players are now exiting. Long liquidation has driven much of the latest move. Bears are pressing every failed bounce as long as production stays near records and storage holds above average. Volatility is elevated. Daily ranges reach roughly $0.40–$0.60 on a $4 handle. That scale of intraday movement punishes poor position sizing on both sides. Sentiment has shifted from “winter squeeze” to “fade every rally” unless a colder pattern appears on the extended maps.

Short-Term Outlook: Bears In Control Below $5.00

In the short term, bears control Natural Gas (NG=F). The front month is pinned close to $4.113 with the $4.052 low just below and $3.913 as the next target. Storage sits roughly 2.8–3.0% above norms even after a -177 Bcf draw. Production is printing around 112.5 Bcf per day. Demand is set to drop from about 142.3 Bcf per day to 126.3 Bcf per day next week. LNG exports and power demand help but do not flip the balance. Under that mix, the burden of proof lies with the bulls. Any bounce is likely to be short-covering, not a confirmed trend change, unless weather models add a new cold leg or the $3.90 area triggers aggressive physical and financial buying.

Medium-Term Setup: Weather Optionality Versus Structural Supply

The medium-term picture for Natural Gas into the heart of winter is more nuanced but still weather-driven. On one side, the market starts deep winter with storage slightly above normal and production near historical highs. That combination caps upside unless the cold pattern is strong and persistent. On the other side, a genuine multi-week cold outbreak across North America and key importing regions could rapidly tighten balances. The recent move proves NG=F can trade above $5 when weather risk dominates. The question is whether January and February will deliver that risk again. Until forecasts and realized temperatures diverge clearly from the current mild path, the market will treat rallies as opportunities for profit-taking and fresh shorts.

Final Stance On Natural Gas (NG=F): Short-Term Sell, Bearish Bias

Given the current data, the stance on Natural Gas (NG=F) is bearish. Price is down 22.23% on the week to $4.113. The breakout above $5 failed. Storage is still about 3% above norms after a -177 Bcf draw. U.S. dry gas production is near 112.5 Bcf per day, with average December output at record levels. Demand is projected to fall from 142.3 Bcf per day to 126.3 Bcf per day next week. Technical support at $4.052 is fragile, and $3.913 is back in play. Under these conditions, NG=F is a Sell on strength rather than a buy-the-dip candidate. A colder weather turn or a sharp reaction at $3.913 could justify a shift to neutral or constructive later. For now, with warm forecasts, heavy supply, and broken technicals, the data support a clear short-term Sell / bearish view on Natural Gas (NG=F).

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