Natural Gas Price Forecast - NG=F Slides Toward Key $3.57 Support As Ng=F Extends 33% Drop

Natural Gas Price Structure For Ng=F As 2026 Begins

Natural gas enters 2026 with Ng=F locked in a sharp downside correction, front month futures trading in the 3.70–3.75 dollars area after failing to hold the late-2025 spike toward 5.50 dollars. The move is not a random pullback. It combines three forces that all show up in the data: a warm start to winter that has cut heating degree days to 413 from 439, storage still sitting at 3,375 bcf, around 58 bcf above the seasonal five-year average, and record Lower-48 output running near 110.1 bcfd while LNG feedgas demand hovers around 18.5 bcfd. At the same time, the forward curve and regional basis show that the market is not writing off winter risk. January forwards have strengthened on growing odds of mid-to-late January cold, and Northeast basis for key delivery points such as Transco Zone 6 New York and Iroquois remains elevated even as national benchmarks retreat.

Short Term Momentum For Ng=F Points To Extension Of The Selloff

The short-term tape around Ng=F is clearly controlled by sellers. From the December peak near 5.50 dollars, front-month futures slid to a recent intraday low around 3.68 dollars, a decline of roughly 1.80 dollars, or about 32.8%, in only 17 days. That drawdown is in line with, but not yet worse than, previous downside swings since the 2024 bottom, which ranged between roughly 31.6% and 41.5%. Price broke to a new retracement low at 3.68 dollars, posting a wide red candle that set both a lower daily high and a lower low and confirmed follow-through after an earlier inverted hammer failed near the 10-day average. Bears now have a clear reference at the prior trough around 3.79 dollars; as long as daily closes stay below that level, the pattern remains a straightforward continuation rather than a completed correction.

Key Technical Levels Around The 200 Day Average For Ng=F

Below the market, the first structural magnet is the 200-day moving average near 3.57 dollars, which aligns with pivot highs from October and marks the first time since late October that Ng=F is retesting that longer-term trend line from above. That zone should be treated as the primary decision point for the next leg. A clean break through the 200-day average would open the door toward the 78.6% Fibonacci retracement around 3.45 dollars, measured off the 2025 advance, where a minor uptrend line also intersects. If that 3.45 dollars area fails, the logic of prior cycles points to a deeper washout. A measured move from the current ABCD structure on the chart produces a lower target near 3.26 dollars, which would represent roughly a 40% decline from the 5.50 dollars high and bring the current correction closer to the 41.5% collapse seen after the March 2025 trend high around 4.90 dollars. On the upside, the market first has to reclaim the 3.79 dollars prior low on a daily close to signal that aggressive selling is losing control; above that, the 3.95–4.05 dollars band becomes the near-term recovery zone where the last attempt to break higher failed.

Momentum Indicators Confirm Pressure But Stop Short Of Full Capitulation

Momentum indicators echo the price action without yet signaling a completed capitulation. On shorter intraday time frames, Ng=F saw its relative strength index dip toward the high-30s, around 38, after failing near 4.05 dollars and sliding back inside its rising channel. That level is weak but not oversold, which fits an ongoing correction rather than a terminal flush. The 50-period moving average on the two-hour chart has rolled over around 3.85 dollars, turning from support into near-term resistance, while the longer 200-period average near 4.17 dollars now stands well above the market as the next ceiling if bulls manage a more meaningful bounce. On the daily chart, the MACD histogram has started to show a slightly less negative profile, hinting that downside momentum is not accelerating further, but the MACD line remains beneath its signal line. Taken together, momentum tells a simple story: sellers remain in charge, volatility has picked up, and any short-covering rally into the 3.85–4.05 dollars area is still more likely to attract fresh selling than to mark a durable trend reversal unless supported by a material change in fundamentals.

Warm Early Winter, Heating Degree Days And Storage Cushion

Fundamentals explain why the technicals are breaking down. The warm pattern into early January has directly hit heating demand. Forecasts call for above-normal temperatures across the United States through around January 14, and heating degree days, a standard measure of temperature-driven demand, have slipped from 439 to 413 in the latest readings. That softness shows up in storage behavior. The most recent reported withdrawal was only 38 bcf for the week ended December 26, leaving working gas in storage at 3,375 bcf and roughly 58 bcf above the five-year average for this point in the season. In a normal or colder-than-normal winter, the market would demand larger weekly draws to pull that surplus down. Instead, inventories remain comfortable into the heart of the heating season, which gives bears confidence to sell each failure at resistance.

Record Production And Lng Feedgas Flows Anchor The Supply Side

Supply is not bailing out the bulls. Lower-48 dry gas output averaged roughly 110.1 bcfd in December, a fresh record, while average feedgas deliveries to the eight major U.S. LNG export plants reached around 18.5 bcfd. Export demand has become a structural pillar of the market and has helped lift prices enough for Ng=F to post two consecutive annual gains, but it has not yet overcome the sheer volume of domestic production and the lack of weather-driven draws. As long as output stays near record levels and storage runs above average, the burden of proof remains on any bullish narrative that does not involve a meaningful cold surprise or a supply-side shock.

Forward Curve Signals Winter Risk Even As Spot Softens

The forward curve shows that traders are not complacent about winter, even as spot futures sell off. During the December 23–30 window, January fixed-price forwards across many hubs posted the largest gains along the curve as extended forecasts began to hint at more aggressive cold risks in mid-to-late January. The result is a front-weighted curve where near-term contracts are bid relative to later strips, despite the current mild pattern. In the Northeast, basis premiums remain particularly aggressive. Forward pricing for key delivery points such as Transco Zone 6 New York starts above 9 dollars per MMBtu in early 2026, then collapses below zero by mid-2026 before rebounding toward roughly 5.50 dollars into early 2027, reflecting intense seasonal volatility and pipeline constraints that can send cash prices spiking in cold snaps. Iroquois Zone 2 forward curves show winter peaks near 14 dollars per MMBtu against much lower summer values around 4 dollars, underlining how quickly regional balances can tighten when weather turns. In Western Canada, NOVA/AECO C forward basis stays deeply negative versus Henry Hub across 2026–2028, with wide seasonal swings, emphasizing that localized oversupply and takeaway bottlenecks remain part of the structural backdrop even as U.S. benchmark futures appear balanced on paper.

Regional Cash Prices And Basis Reinforce A Two Speed Market

Day-ahead pricing further illustrates the split between national comfort and regional tightness. Indicative values show hubs such as Iroquois Waddington around 3.87 dollars and a Northeast regional average near 2.345 dollars, with Algonquin Citygate close to 2.125 dollars at the start of 2026. Those levels are modest in absolute terms but still price a premium over Henry Hub for constrained demand centers that can see explosive moves during storms. At the same time, Western and Permian-linked hubs have spent much of the last year trading at steep discounts, sometimes plunging toward deeply negative basis values when mild weather, pipeline maintenance or strong associated gas production in oil plays collide. The takeaway is straightforward: the national benchmark Ng=F may look comfortable, but parts of the system remain one strong cold outbreak away from price spikes, while others are chronically oversupplied.

Ung Tracks Henry Hub Slide And Shows How Futures Weakness Bleeds Into Equities

Equity-linked exposure has reacted quickly. The United States Natural Gas Fund, NYSEARCA:UNG, dropped roughly 6.7% in the last U.S. trading session of 2025, closing near 12.26 dollars after trading between 12.18 and 12.69 dollars. That move closely tracked the 5.7% decline in front-month February Henry Hub futures to about 3.745 dollars per MMBtu. Gas-weighted producers followed suit: names such as EQT fell around 1.9%, Antero slid 1.8%, and Range Resources lost 2.3%, while LNG exporter Cheniere managed a modest 0.5% gain on the back of structurally strong export flows. For portfolio managers, the message is that directional exposure through NYSEARCA:UNG or upstream stocks remains highly sensitive to daily weather model shifts and storage headlines. Unless the fundamental backdrop changes sharply, dips in Ng=F are likely to feed directly into underperformance for this part of the equity complex.

Macro Energy Backdrop Keeps A Floor Under Ng=F But Caps Upside

Broader energy market dynamics are not supportive enough to offset gas-specific headwinds, but they help prevent a full collapse. On the oil side, the latest U.S. data showed a 5.8 million barrel build in gasoline inventories and a 5.0 million barrel increase in distillates, underscoring demand concerns and adding a bearish tone to the overall energy complex. At the same time, plans by key producers to pause further output increases into early 2026 and lingering geopolitical risk in major supply regions are keeping crude prices from breaking down completely, which indirectly supports gas through associated production decisions and cross-commodity hedging flows. On the demand side, China’s crude imports jumped about 10% to roughly 12.2 million barrels per day, signaling that Asian energy appetite remains robust even as Western demand softens. For Ng=F, this mix means macro conditions are neither a clear tailwind nor a collapse trigger: the contract trades primarily on weather, storage and domestic supply, with oil and cross-asset flows offering only a soft floor.

Trading Range, Support And Resistance For Ng=F In Early 2026

Near term, the 3.65–3.71 dollars band marks the active battlefield for Ng=F. Futures recently closed around 3.71 dollars with markets shut for the New Year holiday, essentially matching the December 31 level and confirming that sellers are not yet finished. Immediate support sits at 3.65 dollars, with a secondary zone near 3.50 dollars; if those levels give way, attention shifts quickly to the 3.45 dollars Fibonacci retracement and then the 3.26 dollars measured-move objective. On the upside, resistance is clearly defined. The first barrier is just under 3.85 dollars, where the rolled-over 50-period moving average now caps intraday rallies. Above that, the 3.95–4.05 dollars pocket marks the last failed breakout and will require a decisive push, ideally with colder forecast revisions and stronger storage draws, to flip from resistance back into support. Only once price reclaims the 4.17 dollars 200-period intraday average and starts closing days back above the 3.79 dollars prior swing low will the tape look like more than a tactical short-covering move.

Natural Gas Price Outlook And Positioning Stance For Ng=F

Putting the pieces together, Ng=F starts 2026 with fundamentals and technicals aligned on the bearish side in the short term. The contract has already dropped more than 30% from the 5.50 dollars peak, momentum is negative, storage remains 58 bcf above the five-year average at roughly 3,375 bcf, production runs at a record 110.1 bcfd, and early January weather is warm with heating degree days slipping toward 413. Forward curves and regional basis, however, warn against complacency. January and winter strips have firmed on the risk of a late-month cold pattern, Northeast basis can still blow out with Transco Zone 6 New York forwards starting above 9 dollars into early 2026, and Western and Canadian hubs trade at levels that can shift violently when either demand or takeaway capacity changes. That mix argues against an outright structural short at current levels, but it does not justify aggressive long exposure either. On a pure risk-reward basis, the stance that fits the data is a Hold on Ng=F with a tactical bearish bias: rallies into the 3.85–4.05 dollars zone favor fading rather than chasing, while fresh long positions make more sense only closer to the 3.45–3.26 dollars support band or after a clear shift in weather, storage trends or production behavior confirms that the current down-leg has fully exhausted.

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