Natural Gas Price Forecast: NG=F Rebounds to $3.48 as Market Eyes EIA Storage Shock

Natural Gas (NG=F) Tries To Build A Floor Above $3.40 As Weather, Storage And ETFs Clash

Henry Hub Futures And UNG Show A Fragile Bounce After A Sharp Selloff

The United States Natural Gas Fund closed at $11.28 after a 3% drop on Tuesday, tracking a steep slide in front-month natural gas (NG=F) futures. By early Wednesday, February Henry Hub futures had rebounded roughly 4% to about $3.48 per mmBtu, recovering from a test of the $3.355 area that drew buyers into the close. Spot Henry Hub cash briefly collapsed toward $2.86 per mmBtu earlier in the week, underlining how quickly physical pricing can disconnect when weather turns milder and local demand fades. Short-term, the futures curve is trying to stabilize, but the rebound is happening against a backdrop of soft spot pricing and a skeptical physical market.

Weather, Heating Demand And EIA Storage: Why The Tape Is So Whippy

Warm forecasts through roughly January 10 cut heating demand just as winter should be tightening the market. One major weather service projects above-normal temperatures into early January, and one analytics firm estimated U.S. gas demand will average about 2.3 bcf/d lower from Wednesday to Friday versus prior expectations. That loss of gas-weighted heating degree days pushed February Nymex gas down nearly 5% on Tuesday before the overnight bounce. Traders now focus on the next EIA storage report as the key catalyst: weak withdrawals would confirm that mild temperatures and strong supply are keeping inventories fat, while a more aggressive draw would validate the late-session futures recovery and support prices above $3.40.

Production, Demand And LNG Flows: Oversupplied Market With Pockets Of Tightness

Fundamentals remain heavy. Lower-48 dry gas output is running near 112.2 bcf/d, while total demand is around 89.5 bcf/d, with LNG feedgas flows at roughly 18.5 bcf/d. That profile shows a market still structurally oversupplied, with exports absorbing a meaningful share of the excess but not enough to flip the balance on their own. Liquefaction demand near 18.5 bcf/d is supportive for natural gas (NG=F), yet storage injections and relatively modest domestic consumption limit upside. The setup argues for volatility around weather and weekly storage data, not a smooth trending bull market.

ETFs BOIL And KOLD Mirror A Two-Way Market, Producers Trade Mixed

Leveraged products underline the indecision. A 2x long ETF on natural gas (NG=F) fell about 2.8% on Tuesday, while the inverse product gained roughly 2.7%, reflecting how rallies are quickly faded and dips just as quickly bought. Among producers with heavy gas exposure the tone is mixed: one large U.S. gas producer was up roughly 0.1% in early premarket trade, while another declined about 1.8%. Equity pricing is signaling that the tape is choppy rather than trending, with speculators trading the ranges in derivatives while underlying corporates respond more slowly.

Technical Structure: 55-Day Barrier At $3.41, Bearish Bias Until It Breaks

Technically, front-month NG=F is boxed in by a cluster of levels. Prices have been oscillating around the $3.410 zone, where the 55-period moving average is acting as a ceiling against deeper pullbacks. Repeated failures to punch decisively above that line keep the short-term trend tilted bearish. One classical technical roadmap calls for a corrective slide toward about $3.165 and then down toward next support near $2.950 if $3.41 continues to cap bounces. For today, the projected range between $3.165 and $3.650 captures that tug of war: sellers lean into rallies near the top of the band, buyers defend in front of the mid-$3 and high-$2 support area.

Medium-Term Levels: 200-Day EMA Near $3.63 And $4.00 As The Upside Pivot Zone

On the daily chart, the 200-day EMA sits around $3.63 and defines the real line in the sand between a tactical bounce and a sustainable uptrend in NG=F. Price gapped higher on Wednesday, filling an old December gap and signaling that aggressive shorts are taking profits in the low-$3 range. If the contract can hold above roughly $3.40 and then push through $3.63, a run toward the psychological $4.00 handle becomes realistic as winter progresses, especially if late-January forecasts turn materially colder. Failing to clear the 200-day EMA would confirm that the current move is just a reflex rally inside a broader bearish or sideways regime.

Regional Dislocations: Negative Mexican Hub Prices Expose Pipeline And Basis Risk

While Henry Hub benchmarks the headline price, regional markets tell a more extreme story. In northern Mexico, gas at El Encino has repeatedly traded at negative prices since early December as constrained takeaway capacity from the Waha hub in the Permian forces producers to pay buyers just to move molecules. Waha itself has averaged below zero at times, illustrating how local oversupply and pipeline bottlenecks can decouple regional cash markets from the $3-plus Henry Hub futures tape. For natural gas (NG=F) traders this means the benchmarks can look stable even as some hubs face extreme discounts, a reminder that pipeline, export, and demand constraints matter as much as headline supply.

Spot Henry Hub Reclaims $3.00, Futures Probe Above $3.50 On Colder Forecast Shifts

Despite localized stress, national benchmarks are stabilizing. Spot Henry Hub recently reclaimed the $3.00 level for the first time this year, and futures have probed above $3.50 as colder trends crept back into late-January weather models. Short-term, the market appears to have carved out a triple-bottom style base in the low-$3 area; each dip toward roughly $3.15–$3.20 has attracted buyers, with subsequent rebounds extending to the mid-$3 zone. That pattern fits a market where positioning has been cleaned out after a string of losses, leaving room for fresh length if forecasts add heating demand and storage withdrawals accelerate.

Global Flows: Canadian LNG Ramp-Up And Export Demand Add A Slow-Burn Tailwind

Outside the U.S. mainland, export dynamics are turning more supportive. A major Canadian LNG terminal is ramping its second train, and January exports from Canada are expected to set a new record as Western Canadian Sedimentary Basin gas is pulled toward the coast. That incremental offtake tightens North American balances at the margin and supports NG=F over a multi-month horizon, even if the immediate price impact is overshadowed by U.S. weather and storage headlines. The broader theme is that LNG infrastructure growth is steadily increasing baseline demand for North American gas, which helps put a floor under prices once extreme oversupply phases pass.

Volatility, Storage Curve And The ‘Widow Maker’ Spread Signal A Less Panicked Winter

Curve dynamics confirm that this is not a classic panic-driven winter spike. The notorious March–April spread, often called the “widow maker,” is relatively calm, implying that traders are not aggressively bidding up late-winter scarcity. Combined with commentary that withdrawals must increase to match historical norms, the storage curve suggests that inventories remain comfortable even as temperatures fluctuate. For natural gas (NG=F), that keeps the market in a regime where weather and weekly data move prices sharply day-to-day, but structural fear of shortages is limited. That, in turn, caps the likelihood of a sustained blow-off rally unless a persistent cold pattern emerges.

Natural Gas (NG=F) Investment Stance: Speculative Buy On Weather And LNG, Not A Core Holding

Pulling the data together, the picture is of a market caught between bearish supply-storage math and emerging bullish catalysts. Dry gas output near 112.2 bcf/d and demand around 89.5 bcf/d with roughly 18.5 bcf/d of LNG flows point to ongoing surplus, and technical resistance at the 55-day average around $3.410 plus a 200-day EMA near $3.63 argues against chasing NG=F blindly higher. On the other hand, Henry Hub futures have bounced to about $3.48 after a capitulation-style break, spot prices have reclaimed $3.00, Canadian LNG exports are ramping, and late-January weather models are adding heating demand. With a trading range projected between roughly $3.165 and $3.650 and downside supports flagged near $3.165 and $2.950, the risk-reward over the next few weeks favors a tactical long bias rather than a structural short. The stance here is that natural gas (NG=F) is a speculative Buy with a trading target in the $3.80–$4.00 region if futures can clear and hold above the $3.63 200-day EMA, while a weekly close below about $3.15 would downgrade that view toward a neutral Hold and reopen the path back toward the high-$2 support zone.

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