Natural Gas Price Forecast: NG=F Clings to $3.40 Support After 119 Bcf Storage Hit

Natural Gas (NG=F) – From Winter Spike To A Fragile Base Around $3.40

Front-month natural gas (NG=F) is trading back in the low $3s after a violent round-trip from the 2025 high. From a peak near $5.50, the contract sank to this week’s low around $3.32, a slide of roughly $2.18, or about -39.6%. That drawdown is almost identical to prior corrections in the same broader uptrend, which ranged between -36.8% and -41.7%. The market has therefore completed a correction that is large enough in both price and percentage terms to qualify as a full reset rather than a minor pause. The current rebound has reached as high as $3.59, but that move stalled just underneath the 200-day moving average clustered near $3.56, and price has since faded back toward $3.40–$3.43. The tape shows a market that is trying to carve out a floor, but that has not yet proven it can reclaim trend control from sellers.

Price Damage, Symmetry And What It Says About The Cycle

The magnitude of the latest decline in NG=F is critical. A fall of -39.6% from $5.50 to $3.32 lines up almost perfectly with the earlier bear legs of -36.8% to -41.7% that occurred within the broader uptrend that started after the 2024 bottom. When pullbacks repeatedly terminate in the same percentage band, it usually signals a recurring correction template rather than a structural break. That does not guarantee a bottom, but it strongly suggests that natural gas is at least very close to the price area where previous selloffs exhausted themselves. The fact that the current low sits inside an established rising channel and is followed by an immediate bounce toward $3.59 reinforces the notion that this is a mature correction, not the opening move of a new crash cycle.

Storage, Weather And The Meaning Of A 119 Bcf Withdrawal

The fundamental backdrop for natural gas (NG=F) is defined right now by storage and weather, not panic. The latest report from the EIA showed a 119 Bcf withdrawal for the week ended Jan 2, leaving working gas in storage at 3,256 Bcf. That level sits about 31 Bcf, or roughly 1%, above the five-year average for this time of year. The number itself was almost exactly in line with the 120 Bcf consensus that traders were already using, which explains why futures barely reacted: Henry Hub slipped to around $3.41–$3.43 per mmBtu immediately after the release, giving back a portion of the prior day’s gains. The draw was concentrated in the East and Midwest, where colder weather boosted heating demand, but it did not reveal a surprise tightening of the system. The message from storage is that the market is balanced and seasonally healthy, not grossly oversupplied, but also not tight enough to force a sustained squeeze higher without additional weather help.

Weather expectations are now the main swing factor. Forecasts point to a colder window around Jan 17–21 across the Midwest and Eastern U.S., which helped ignite earlier short-covering that pushed February natural gas to a settle near $3.525 on Wednesday. However, traders have just experienced several weeks in which anticipated cold never rolled forward consistently, forcing the market to unwind risk built on earlier model runs. After a month of forecast whiplash, the strip is no longer willing to pay aggressively for long-range cold maps. It wants confirmation in the form of repeated cold revisions and actual demand, not one-off model prints that can vanish with the next update.

Technical Structure For NG=F: 200-Day Average At $3.56 As The Line Between Base And Breakdown

The price structure in NG=F sits at a critical inflection level. On the daily chart, the 200-day moving average around $3.56 is acting as the defining pivot between a completed correction and an ongoing grind lower. This week’s rally carried natural gas to an intraday high of $3.59, just above that moving average, but the market failed to hold that breakout level and quickly rolled back down. This rejection shows that sellers are defending the 200-day line as a ceiling rather than allowing it to flip back into support. The same zone near $3.56–$3.64 has history: the 2024 peak at $3.64 aligned with this area, and the market recognized it again in November/December 2024 and in October 2025. That cluster of prior reaction points increases the technical importance of this range as the battleground between bulls and bears.

On the downside, near-term support was confirmed around $3.32 at the lower edge of a rising channel, following the fresh low for the current bearish leg. If that support floor fails, the next downside band sits at $3.26–$3.24. Those figures are important for two reasons. First, they correspond to a 78.6% Fibonacci retracement of the preceding upswing. Second, they mark the 78.6% projection of a falling ABCD corrective pattern that technicians often watch as a terminal zone for a complex pullback. If price slices cleanly through that band, attention will immediately shift to the psychological and technical floor around $3.00, where a longer-term uptrend line that spans several seasons is likely to intersect with horizontal support.

On the topside, the roadmap is equally clear. The first requirement for a convincing bullish turn is a daily close above the 200-day average at $3.56, not just an intraday spike. That would signal that the market is willing to treat that moving average as a base again rather than as resistance. From there, the next upside checkpoints are a prior swing low and congestion area around $3.80, followed by the 10-day moving average near $3.88 that currently slopes downward. If natural gas can sustain closes above both $3.56 and $3.80–$3.88, the path opens toward the round $4.00 level, which is the logical target for a fully developed counter-trend rally. Until that structure is in place, price action remains corrective and vulnerable inside the $3.20–$3.60 band.

Derivatives, ETFs And Leverage: A De-Risking Phase Rather Than A Liquidation Spiral

Positioning in natural gas derivatives reinforces the view that the market is cooling, not collapsing. After the early-January rebound that drove February NG=F toward $3.525, both futures volume and open interest have slipped, indicating that market participants are closing positions rather than aggressively adding new longs or new shorts. That is classic de-risking behavior after a volatile move rather than the pattern seen at the start of a fresh speculative wave. In other words, the tape shows traders reducing exposure, not building the kind of lopsided bets that typically produce explosive follow-through.

The ETF complex delivers the same message. The United States Natural Gas Fund (UNG) lost about 3.3% on the latest downswing, reflecting the pullback in the underlying contract. Leveraged long product BOIL dropped around 5.1%, while the inverse KOLD gained roughly 5.4%, showing how levered structures are amplifying noise rather than signaling a regime change by themselves. There is no evidence of extreme retail capitulation or manic chasing at this stage; instead, there is steady, tactical rebalancing after a test of major resistance. For natural gas, that means implied volatility stays elevated, but the risk of a sudden forced liquidation wave is currently lower than it would be in a heavily over-levered environment.

Global Gas And LNG: JKM And TTF Converge While Henry Hub Tracks Higher Through 2030

The global context for natural gas (NG=F) is shifting as LNG supply growth and demand realignment compress regional price spreads. Asian benchmark JKM and European TTF are now trading in a relatively tight band for 2026, with forward prices roughly in the $7–$10 per mmBtu range. Against that backdrop, Henry Hub forwards in the $3–$4 area still offer a margin, but the gap is far narrower than the extreme levels reached during the 2022 energy shock. This convergence is being driven by a wave of new LNG volumes from the U.S., Qatar, and other exporters, combined with rising domestic demand in key consuming regions.

For U.S. exporters, this new regime means shipping and feed-gas costs are now critical in determining netbacks. When JKM and TTF sit only a few dollars above Henry Hub, freight, liquefaction and pipeline tariffs can quickly erode profitability. Forward curves from 2026–2030 show Henry Hub grinding higher as structural U.S. gas demand increases, while international markers drift sideways to slightly lower once the upcoming supply wave hits the water. That pattern implies a world in which gas remains globally traded and volatile but less prone to extreme regional dislocations. For NG=F, the implication is that deep sub-$3 pricing becomes more difficult to sustain over time if LNG exports and domestic demand keep absorbing incremental supply, while extreme spikes will likely require very specific shocks rather than just normal winter volatility.

Spot And Regional Cash Markets: Henry Hub And TTF Reflect A Stable, Not Stressed, System

Spot and regional cash markets echo the message from futures. Henry Hub cash prices, which spiked above $5 per mmBtu in early December, have retreated back into the low-$3 range, roughly alongside the prompt contract. Midday pricing snapshots show that many U.S. hubs are now posting modest declines as seasonally mild conditions in some regions offset localized cold. The pattern is one of gentle softening rather than a collapse, consistent with a system that has adequate supply and only localized tightness.

In Europe, the benchmark Dutch TTF trades around €27–28 per MWh, down roughly 3% on the latest session. Storage levels across the EU remain near 58% full, comfortably above levels that would trigger alarm for early January. Positioning data shows that investment funds still hold a net short of around 72.4 TWh in TTF, but that short has been reduced for three consecutive weeks as funds have bought back roughly 6.2 TWh. That short covering signals declining conviction in further downside, not an outright endorsement of a bullish trend. The combined picture across Atlantic and European hubs is a market that is well supplied, responsive to weather, and free of acute stress, but not so loose that prices must crash.