Natural Gas (NG=F) Hovers Near $3.01 As 45% Correction Meets $2.95–$2.89 Support Zone

Natural Gas (NG=F) Near $3: Deep Correction, Stalled Momentum At Structural Support

Natural Gas (NG=F) Price Structure Around $3.01–$3.31

Front-month Natural Gas (NG=F) is sitting on a classic exhaustion zone. The February contract recently printed a low around $3.01, with Friday trading showing a slightly higher intraday low near $3.02 and a marginally higher high, then fading into the close. The daily candle structure is telling you sellers still control direction, but their pressure is weakening: three consecutive sessions with similar closes, higher intraday lows, and only marginal new lows is classic late-stage trend behaviour, not the start of a fresh impulse.

From the November peak around $5.50 down to this week’s $3.01 trough, the contract has shed roughly $2.49, a decline on the order of forty-five percent. That drop is almost identical in magnitude to the previous major downswing from the March 2025 high near $4.90 to the $2.62 bottom, where the market fell around forty-six and a half percent before reversing. When a correction repeats the percentage damage of the last major washout, you are statistically close to the point where the weak hands have largely been cleaned out.

Trend tools confirm that the move is stretched but not yet broken. The short-term ten-day moving average has rolled over and is sliding near $3.31, repeatedly capping bounces; both Tuesday and Wednesday highs were rejected precisely in that band. As long as price stays below that falling average, bears can keep selling into rallies. Underneath, a long-term uptrend line is attracting support for the second day in a row, marking the area where tactical shorts start to bank profits and where value-oriented buyers begin to probe.

Below $3.01, an important confluence sits between roughly $2.95 and $2.89. That zone combines the eighty-eight point six percent Fibonacci retracement of the last major leg, a full measured-move target for the current ABCD structure, and an earlier monthly low near $2.89. A wash into that pocket followed by a fast recovery would fit perfectly with a capitulation print before a broader mean reversion higher.

Physical Natural Gas Cash Market: Northeast Spike Versus Softer Chicago And West

Physical flows show a very different picture than the paper curve suggests. In the cash market, spot prices delivered across the long Martin Luther King Jr. holiday weekend into Tuesday surged where the weather risk is most acute. The Northeast is the centre of gravity: Transco Zone 6 New York changed hands around $8.125, Texas Eastern M-3 delivered near $6.335, and Transco Zone 5 Station 165 around $6.28. Those levels embed a clear winter premium versus Henry Hub futures just above $3 and highlight how pipeline constraints and cold-weather demand still generate explosive regional spreads.

NGI’s regional charts for the Northeast from early 2025 through early 2026 show the same pattern: violent spikes above $35 per MMBtu during last winter’s tight episodes, followed by a long stretch of spring and summer trading in the $2–$4 band, then another push into the mid-teens as the latest winter arrived. The structural reality is that basis and regional volatility have not disappeared; they have just been temporarily masked by strong production and mild shoulder-season demand.

Chicago Citygate tells the opposite story. Even with single-digit temperatures on the forecast, spot prices there have drifted lower in recent days. That shows how much impact storage, infrastructure, and regional balancing can have. Where inventories are comfortable and flows are flexible, cold alone is no longer enough to sustain a broad rally; it only generates short-lived spikes.

On the western side of the grid, indexes such as Southern Border PG&E near zero and El Paso Plains Pool slightly negative remind you that localized oversupply and limited takeaway can still crush prices, even as the Northeast trades several dollars richer. Oneok WesTex around minus $0.26 underscores the fact that West Texas still discounts heavily to benchmark, even though forward basis is improving from the extreme blow-outs seen earlier.

Storage, Production, LNG And Demand: Why The Tape Feels Heavy

The main reason Natural Gas (NG=F) cannot hold rallies is simple: supply and inventories are still generous relative to demand. In the United States, the latest weekly EIA report showed a withdrawal of only seventy-one billion cubic feet for the week ending January ninth, versus expectations near ninety-one and a five-year average draw around one hundred forty-six. Even in the heart of winter, the system is not drawing down as aggressively as history would suggest.

As of that report, U.S. underground stocks sit about two point two percent above last year’s level and roughly three point four percent above the five-year seasonal norm. In Europe, storage sits around fifty-two percent of capacity compared with a typical sixty-eight percent for this point in the season, which is tighter than usual there but not yet severe. That mix means the U.S. still has room to absorb weather swings without triggering panic about end-of-season emptiness, while Europe’s relative deficit quietly supports export economics.

On the supply side, U.S. dry gas output in the lower forty-eight is running close to an estimated one hundred thirteen billion cubic feet per day, nearly nine percent higher than a year ago. Gas demand across the same footprint is about one hundred four point nine billion cubic feet per day, roughly two and a half percent lower year on year. That combination of stronger output and slightly weaker consumption is exactly what a bear market wants to see.

Yet even here, the seeds of the next move are visible. The EIA has trimmed its forecast for 2026 dry gas production down to around one hundred seven point four billion cubic feet per day from a prior estimate a little above one hundred nine. At the same time, estimated net LNG flows to U.S. export terminals are near nineteen point eight billion cubic feet per day, up about two and a half percent on the week, and Gulf Coast LNG netbacks sit in the eight to eleven dollar per MMBtu range, leaving a wide margin over Henry Hub futures just above three. Those economics make it rational to keep pushing gas out of the U.S. whenever facilities are fully available.

International And Regional Benchmarks: Turkey And Basis Curves Show The Arbitrage

International pricing underscores the gap between U.S. oversupply and global tightness. In Türkiye’s spot market, one thousand cubic meters of gas recently cleared at fourteen thousand one hundred eighty-four lira. Using an exchange rate near forty-three point three lira per dollar, that is roughly three hundred twenty-eight dollars per thousand cubic meters, or about nine to ten dollars per MMBtu once converted. On the same day, the local spot trade volume was around eleven point seven million lira, with eight hundred twenty-five thousand cubic meters changing hands and pipeline receipts of roughly three hundred thirty-five million cubic meters.

That Turkish price sits roughly three times above Henry Hub, in line with European hub benchmarks that justify sustained LNG pulls. NGI’s forward-basis curves for West Texas points such as Waha, El Paso Permian, and Transwestern show differentials improving from deeply negative territory early in 2026 toward around minus one dollar per MMBtu across 2027 and into early 2028. That trajectory reflects slow progress in relieving local congestion and linking cheap Permian molecules to higher-priced coastal and export markets.

In western Canada, the NOVA/AECO forward fixed curve from 2026 to 2028 outlines a mid-2026 trough, a peak near two dollars forty-five cents per MMBtu in early 2027, and a renewed grind higher toward roughly two dollars sixty by 2028. All of these curves share the same message: today’s low prices are not perceived as permanent. The forward market is quietly re-pricing the second half of the decade at meaningfully higher levels than today’s spot.

Weather, Power Loads And The Limits Of The Cold-Weather Bid

Weather remains the most visible short-term driver, but its impact is now filtered through robust storage and efficiency gains. The current period includes a prolonged cold outbreak across much of the United States, with forecasts pointing to below-normal temperatures across the northern and eastern regions from roughly January twenty-first to the thirtieth. That is precisely why cash prices in the Northeast have pushed sharply higher for gas delivered over the long weekend and into next Tuesday, and why NGI headlines highlight a market “bracing” for extreme cold.

At the same time, aggregate power demand has not exploded. The Edison Electric Institute reported U.S. electricity generation in the lower forty-eight near seventy-nine thousand one hundred eighty-nine gigawatt hours for the week ending January tenth, down more than thirteen percent from the same week a year earlier. Over the last fifty-two weeks, output is still higher by about two and a half percent, but the current weekly dip shows how efficiency, weather patterns, and fuel switching can mute gas-fired generation.

Put together, this explains why Natural Gas (NG=F) is not responding to cold the way it did a decade ago. Regional spikes are still violent where constraints exist, but the national benchmark looks through short bursts of demand if storage is healthy and production is near record levels. Cold now delays the downside and triggers short-covering rallies; it does not automatically start a new secular bull leg without structural tightening.

LNG Feedgas, Operational Noise And The Role Of Exports

LNG exports provide the bridge between cheap U.S. molecules and higher-priced international markets, and short-term operational shifts have been swinging sentiment intraday. Feed gas deliveries to major Gulf Coast LNG facilities such as Corpus Christi and Freeport recently dipped during the week due to electrical and piping problems. That temporarily held back export volumes, allowing more gas to remain onshore and adding to the heavy tone in futures.

By Friday, those flows appeared to be recovering as the outages eased, with net LNG feedgas near nineteen point eight billion cubic feet per day, a modest gain over the previous week. The market’s reaction to these swings is telling. Every time feedgas drops below trend, Natural Gas (NG=F) quickly leans lower as traders model slightly larger end-of-season inventories. When flows normalize, the bearish narrative softens but does not immediately flip; the overarching supply cushion still dominates.

International netbacks in the eight to eleven dollar per MMBtu band versus Henry Hub around three keep the export bid credible over a multi-month horizon. The risk is not economics but uptime and regulatory noise. As long as the U.S. export complex operates near capacity, LNG remains a structural drain on domestic balances and a key pillar of the long-term bull argument.

Rigs, Production Response And Where The Fundamental Turning Point Likely Sits

The rig count and production guidance provide a slower, but ultimately decisive, signal. Baker Hughes data show active U.S. natural gas rigs slipping by two to one hundred twenty-two in the latest week, retreating from the two-and-a-quarter-year high of one hundred thirty reached in late November. Over the last year, that count has climbed from a four-and-a-half-year low near ninety-four. In other words, the industry reactivated rigs aggressively during the upswing, but the latest prices are beginning to bite.

The gap between production around one hundred thirteen billion cubic feet per day and demand near one hundred five will not close overnight. However, as capital budgets respond to strip pricing and the EIA’s downgraded 2026 output forecast to about one hundred seven point four billion cubic feet per day, the probability of a supply plateau or mild decline increases. If forward prices fail to reward producers, the weakest basins will pare back, especially where associated gas is less supported by liquids or oil revenues.

Against that, the futures curve and forward basis curves indicate that buyers are already willing to pay higher prices for firm volumes in the later years. That forward-curve steepness, combined with a nearly forty-five percent drawdown from the last peak and proximity to major support levels around $2.95–$2.89, is exactly the cocktail that preceded prior medium-term bottoms.

Natural Gas (NG=F) Trading View: Speculative Buy Into $2.95–$2.89, With Volatility Risk

Taking all of the hard data together, the message on Natural Gas (NG=F) is that the bearish phase is mature, not fresh. The contract has dropped roughly forty-five percent from the November high near $5.50 to the recent $3.01 low, matching the largest percentage drawdown since the 2024 bottom. Short-term momentum is losing power, as shown by stalled closes and higher intraday lows, while price leans against a long-term uptrend line and approaches a dense support cluster around $2.95–$2.89 tied to Fibonacci retracements, measured-move targets, and monthly lows.

Fundamentally, U.S. storage sits slightly above seasonal norms, weekly withdrawals have been lighter than average, and production around one hundred thirteen billion cubic feet per day still exceeds demand near one hundred five. That is why rallies keep failing. However, the EIA has already marked down its 2026 output forecast, rigs have slipped off recent highs, LNG netbacks between eight and eleven dollars per MMBtu keep exports attractive, European and Turkish benchmarks still trade roughly three times Henry Hub, and forward curves across North America price a gradual recovery through 2027–2028.

Given this configuration, the probability skew over a twelve- to eighteen-month horizon favours higher prices from the current zone rather than a sustained collapse below recent lows. For short-term traders, the optimal approach is to treat dips into $2.95–$2.89 as a high-risk, high-reward entry area for tactical long positions in Natural Gas (NG=F), with risk tightly defined below roughly $2.80 and upside targets in the $3.50–$4.00 band on a first pass and nearer $4.90 if the next winter tightens balances. On that basis, the verdict is bullish with a speculative Buy bias at or below the current $3 handle, accepting that volatility will remain extreme and that a brief flush under the $2.95–$2.89 pocket is possible before the market finally exhausts the bears.

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