Natural Gas Price Forecast: NG=F Climbs Off $3.00 Floor as Cold Snap and LNG Flows Lift UNG

Natural Gas Price Outlook – Front-Month NG=F Rebounds As Weather And LNG Reprice Risk

Henry Hub Futures Recover From Two-And-A-Half-Month Low Near $3.00

Front-month NG=F has flipped from a two-and-a-half-month low near the $3.00 barrier on Friday into a sharp short-covering rebound. February futures ripped roughly 7.6% on Monday, then added about 5% in early Tuesday trading before easing from around $3.37 to about $3.33 per MMBtu by midday. Another snapshot showed February gas near $3.428, up roughly $0.019 or around 0.6%, with the market clearly defending that $3.00 floor. The tape has now migrated into a $3.30–$3.45 band, a classic sign that the market is rebuilding a base after flushing out weak longs.

UNG And Leveraged Products Amplify The Natural Gas Whipsaw

The United States Natural Gas Fund (UNG) translated the futures swing directly into equity terms. UNG jumped 7.5% on Monday, closing at $11.18 before slipping to roughly $11.08 after hours. A two-times leveraged long ETF on natural gas gained around 14% in premarket trade, while the inverse short product dropped close to 15%. The combination shows how aggressively positioning had skewed bearish into the $3.00 print and how quickly that skew reversed once NG=F bounced. UNG tracks NYMEX natural gas futures by holding and rolling front-month contracts, not the spot price, so the Monday settlement near $3.409 and early Tuesday trade around $3.337 explain both the surge and the modest intraday give-back.

Weather Models Flip Colder And Force Shorts To Cover In NG=F

The catalyst for the rebound in NG=F is a clear shift in weather expectations. Forecast data turned colder across the eastern half of the United States for January 17–21, then pushed even colder anomalies across the northern tier for January 22–26. Major models added more than twenty extra heating degree days versus prior weekend runs, plus a highlighted “frosty shot” into the United States late this week and a colder tone in the eleven-to-fifteen-day window. That is exactly the combination that forces short-covering in a winter contract trading near key psychological support. Funds that comfortably pressed shorts on warmer December and early-January projections now have to price in the risk of sustained heating demand into the back half of the month.

Northeast Basis Weakness Shows Market Is Not Pricing A Polar Shock

Despite the colder tilt, regional cash pricing shows the market is not yet pricing a full-blown polar event. New England hubs have registered sharp daily basis moves, with some citygate marks shifting lower by roughly $1.70 to more than $2.20, including negative changes on Algonquin Citygate and both Tennessee Zone 6 200L points. If traders believed an extended deep freeze was imminent, those hubs would be spiking, not softening. A widely watched spread between shoulder-month contracts – the so-called widow-maker – has also remained calm, signalling that structural winter supply fears have eased even as the front month whips higher. For NG=F, that means the weather story has moved from outright bearish to balanced, not yet to panic bullish.

Dry Gas Output Around 109–110 Bcf Per Day Keeps Supply Heavy

On the supply side, NG=F still faces a heavy production backdrop. U.S. dry gas output for January is running near 109.4 billion cubic feet per day, only marginally below December’s roughly 109.7 Bcf/d and within touching distance of record highs. A 0.3 Bcf/d month-on-month dip is negligible in a market of this size and confirms that producers are easing growth rather than cutting volumes. With supply still anchored around 109–110 Bcf/d, every warm forecast revision or LNG hiccup immediately pressures the front month. That is why Friday’s warmer models drove NG=F down to the $3.00 area so quickly.

Federal Outlook Cuts Winter Henry Hub To $3.56 But Lifts 2027 To $4.59

The updated federal short-term energy outlook has quietly reset the reference points for NG=F. The winter Henry Hub average has been reduced to about $3.56 per MMBtu, reflecting mild early-winter temperatures and comfortable storage. At the same time, the 2027 Henry Hub forecast has been raised to roughly $4.59, explicitly tying the outer-year strength to rising LNG feed-gas demand and higher power-sector gas burns. The combination implies that prompt and winter contracts should gravitate toward a $3.00–$4.00 band in normal conditions, while the back of the curve can sustain a noticeably higher average as structural demand tightens the balance.

LNG Projects And Export Arbs Support A Higher Forward Floor For NG=F

Liquefied natural gas is the key structural outlet that ultimately supports NG=F. U.S. export plants are already running at or near record loadings, and new projects are racing to secure long-lead equipment and shipyard capacity. One floating project has extended a letter of award with Samsung Heavy Industries and placed a purchase order for Siemens Energy machinery, with the chief executive targeting a final investment decision “in the next month.” Netback spreads from the U.S. Gulf Coast to Asia have narrowed toward one-year lows as global flows reshuffle, but they still justify high export utilization at current Henry Hub levels. Each additional billion cubic feet per day of LNG capacity coming online toward 2027 moves more of today’s surplus gas offshore, which is exactly why the longer-dated price projection climbs to $4.59 and why a sustained collapse of NG=F into the low-$2 range looks unlikely without a severe macro shock.

Heating Demand, Power Burns And The Shift In The U.S. Gas Demand Stack

On the demand side, the latest annual data shows a subtle but important rotation. Total U.S. gas demand in 2025 rose by about 1.75 Bcf/d, roughly two percent year-on-year, as record heating usage in residential and commercial sectors more than offset the first annual decline in gas-fired power generation since 2021. Mild December weather cut into that heating pillar and allowed NG=F to drift lower, but the projected cold shots in late January restore much of the lost support. If temperatures in Boston, New York and Philadelphia fall as models suggest around January 18–20 and again in the following week, daily load spikes will surface in pipeline nominations and power burns, validating the recent futures rebound.

Coal-To-Gas Switching, Data Centers And Longer-Term Demand For NG=F

Beyond the immediate winter, NG=F is increasingly driven by structural demand: coal-to-gas switching, industrial loads, data centers and LNG. Charts comparing Henry Hub to coal generation show that gas consistently captures marginal megawatt hours whenever sustained pricing in the $3.00–$3.50 range coincides with modest regional basis. At the same time, hyperscale data centers and computing infrastructure are hunting for firm long-term power solutions, and gas plants with pipeline access remain a core option where renewables and storage cannot fully cover peak load. Layered on top of industrial expansions and LNG trains, that demand stack explains how the federal outlook can cut the near-term winter average to $3.56 and still advance the 2027 projection for NG=F to $4.59.

Key Technical Levels: $3.00 Support, $3.60 Resistance, $3.62–$3.65 Pivot And $4.05 Moving Average

Technically, NG=F remains in a broader downtrend on the daily swing chart, but the recent price action has clarified the map. The $3.00 handle is the critical psychological and technical support; Friday’s failure to break it decisively confirmed buyers are active there. On the upside, the January high near $3.60 sits just under the 200-day exponential moving average around $3.62. Above that, a prior swing top at about $3.634 and a fifty-percent retracement level near $3.654 create a tight resistance band likely loaded with stop orders from short positions. If buyers can clear that band and then hold above it, the next obvious magnet is the fifty-day moving average around $4.055. The last trade cluster between $3.33 and $3.45 leaves the contract squeezed between a well-defended floor and a clear ceiling.

Short-Term Trading Bias: Sell The Spikes For Scalps, Buy The $3.00–$3.10 Zone For Swing Exposure

Positioning around NG=F reflects this split. Very short-term traders still treat the market as a sell-the-rally environment, happily leaning short into the $3.60–$3.65 band and depending on weather model warm-ups or softer headlines to push prices back down. However, for swing traders, the asymmetry has shifted. A contract that rejected sub-$3.00, trades in the low-$3.30s and faces a plausible path toward $3.80–$4.05 if the cold pattern persists offers a more attractive risk profile for controlled long exposure. Risking roughly $0.30–$0.40 on the downside from current levels against roughly $0.50–$0.70 potential upside toward the moving average is acceptable if position size and stops are managed tightly.

Cross-Asset Signals From Oil, Gas-Weighted Producers And ETF Flows

Cross-asset behavior supports a more constructive stance on NG=F. Crude benchmarks have rallied on escalating tensions around Iran and continuing uncertainty around Venezuela and sanctions, and natural gas has captured some of that energy beta. Gas-weighted exploration and production companies in Appalachia and the Haynesville region moved higher on Monday and early Tuesday, with one large Appalachian producer up about 2%, another peer closer to 3%, and a leading LNG exporter gaining roughly 2%. Those moves confirm that the futures rebound is pulling capital across the energy complex, not just clearing out speculators. At the same time, UNG and leveraged products show that bearish positioning is no longer one-sided. A 7.5% jump to $11.18 in UNG, followed by only a modest fade to $11.08 despite a futures pullback from $3.37 to $3.33, indicates dip-buyers are present and that downside extensions below $3.00 will require a genuine collapse in weather demand or a surprise supply surge.

Natural Gas Price Verdict On NG=F – Buy On Dips, With Weather And LNG Backing An Upside Bias From The $3.00–$3.10 Area

Viewed strictly on facts – price behavior, production around 109.4 Bcf/d, the federal cut of the winter Henry Hub average to $3.56, the lift of the 2027 projection to $4.59, record LNG exports, colder late-January weather models and clearly defined technical levels – NG=F now offers more upside than downside from the $3.00–$3.10 region. The contract has rejected attempts to break $3.00, rebounded hard on colder forecasts, and trades below resistance that can unlock a move toward the $4.05 moving average if cold shots persist and shorts are forced out above $3.62–$3.65. With that backdrop, the straight call on NG=F is Buy: accumulate on controlled pullbacks into the $3.00–$3.10 zone, use the $3.00 level as a clear line in the sand for risk management, and target the $3.80–$4.05 band as the logical upside objective while weather and LNG demand continue to support the tape.

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