Natural Gas Price Slides Toward $3.70 as Warm Forecasts Dominate but LNG Exports Support NG=F

Natural Gas NG=F drops toward $3.70 as warm forecasts crush the late-December rally

U.S. Natural Gas futures NG=F are sliding hard into the last session of 2025, with the front month trading around $3.70/MMBtu after a daily loss of roughly 6–7%. Intraday ranges have been wide, with prints between about $3.689 and $3.982 as volatility spikes around thin year-end liquidity and rapid shifts in weather models. Earlier in the week, futures ripped from roughly $3.787 up to $4.176, only to reverse as the 50-day moving average near $4.152 and the 200-day around $4.348 capped the move and reminded traders that the broader trend still points lower. Cash-settled products followed the slide. The benchmark NATGAS quote around $3.708 showed a daily loss of about 7.20%, underscoring how quickly the market has flipped from a short-covering squeeze to renewed selling pressure as traders reposition into January.

Weather whiplash drives NG=F: warm 8–15 day outlook overwhelms near-term cold

The core catalyst behind the latest leg down in Natural Gas is not today’s weather but the next two weeks of model runs. Forecasters still flag near-term cold advisories across parts of the United States, but professional traders are focused on the 8–15 day window, where guidance now shows above-normal temperatures dominating into mid-January. Heating degree days are projected to drop from about 439 to 413, signaling a meaningful loss of demand at precisely the time the market usually leans on winter consumption to clear excess supply. That shift flips the narrative from “winter could finally tighten the tape” back to “the next few EIA prints will look soft”. U.S. demand including exports is seen easing from roughly 137.8 bcfd this week to about 134.5 bcfd next week, while production holds at a near-record 110.1 bcfd. That combination of slightly weaker consumption and stubbornly strong output removes the urgency that fueled the recent rally and explains why every warm map update has triggered another wave of selling in NG=F.

Storage and balances: from 166 Bcf winter draw to a disappointing 38 Bcf pull

Under the surface, the storage narrative is more nuanced than today’s price action suggests. The first three weeks of December delivered an unusually heavy fundamental tightening, with aggregate withdrawals above 160 Bcf and a single-week 166 Bcf draw that pushed inventories below the five-year average for the first time since April. That kind of move normally underpins a constructive winter story for Natural Gas NG=F. The problem is the latest weekly data. The most recent Energy Information Administration report showed a 38 Bcf withdrawal for the week ended December 26, well under the roughly 51 Bcf draw the market had positioned for and a fraction of the prior 166 Bcf number. The miss immediately reinforced the idea that mild weather and elevated production can offset the earlier tightening. With three upcoming reporting periods likely to show subdued pulls if warmth persists through roughly January 13–14, the market now fears that the brief dip below the five-year average could prove temporary unless a stronger cold spell materializes later in January.

LNG exports, 19 Bcf/d feedgas and a backwardated curve still support the medium-term NG=F story

Despite the short-term hit, the structural demand picture for NG=F remains firm. Pipeline nominations to U.S. LNG export plants are running near 19 Bcf/d, hovering around record territory as new Gulf Coast capacity ramps and existing terminals push high utilization. That level of feedgas has helped keep Henry Hub close to the $4 handle at times this month, even as weather models turned choppy. Globally, benchmark prices highlight how cheap U.S. gas remains on a relative basis. The European Title Transfer Facility February contract trades around $9.66/MMBtu while East Asian prices sit in a similar band, even after a year in which EU storage spent most of December below the five-year average but never triggered a panic thanks to rising LNG supply. U.S. molecules are effectively exporting that value gap. Forward markets reflect this structural pull. The Natural Gas curve remains in steep backwardation through April, with near-term contracts under pressure from warm weather while out-months hold a premium on expectations of sustained LNG exports and steady power demand. At the same time, developers are pushing additional export capacity, including projects requesting authorization for roughly 460 Bcf per year of LNG shipments into the next decade, signaling that structural call on U.S. gas is not fading.

NG=F technical map: $3.64 and $3.45 as key supports against $4.15 and $4.35 resistance

Technically, NG=F sits at a critical decision zone. The February contract has already produced two sharp swings this week, rallying from about $3.787 to $4.176 before rolling over. That advance stalled exactly where bears wanted it to: near the 50-day moving average at roughly $4.152, just under a 50% Fibonacci retracement level around $4.245 and below the 200-day moving average near $4.348. Trading beneath both moving averages keeps the broader trend tilted lower and frames any bounce as corrective unless proven otherwise. On the downside, the contract is now testing a short-term retracement band between about $3.822 and $3.738. A sustained hold above the upper edge of that zone would argue for a corrective pullback within an emerging basing pattern, especially if a subsequent bounce retakes the $4.15 region with conviction. A decisive break through the lower edge near $3.738, however, opens a window back to the December low around $3.467. Separate technical work from other desks highlights the 100- and 200-day moving averages clustering around $3.60 as another pivotal level; intraday price action has already flirted with that region, and candlestick structures over the past two sessions resemble a reversal configuration that could mark the exhaustion of the latest rally leg. For now, the tape is trapped between roughly $3.45 and $4.20, with momentum skewed to the downside until those moving-average caps are cleared.

Global price spreads and industrial demand: Henry Hub near $3.70 vs $9.66 TTF narrows but preserves the NG=F edge

Beyond daily charts, the strategic backdrop for Natural Gas is defined by global price spreads and industrial behavior. U.S. manufacturers still enjoy a substantial feedstock advantage versus peers in Europe and Asia, where gas often trades above $10/MMBtu. Even with Henry Hub lifting toward the $3.70–$4.00 band this month, the spread to the roughly $9.66 TTF contract remains wide enough to anchor long-term investment in gas-intensive U.S. industries such as chemicals, steel, and heavy manufacturing. That said, the cushion has shrunk compared with the most extreme dislocations seen in 2022, and rising LNG exports plus strong power demand are steadily nudging domestic prices higher. Surveys of energy-focused banks show 2026 Henry Hub expectations easing modestly but still clustering around $3.43/MMBtu, very close to today’s values, while longer-dated averages hold in a similar range. That profile signals confidence that NG=F can support robust industrial demand and export flows without revisiting the ultra-cheap sub-$2 regime on a sustained basis, but it also warns that upside will likely be capped unless a more structural supply crunch emerges.

Natural Gas equities and ETFs: UNG, BOIL, KOLD and producers echo the futures washout

The equity and ETF complex tied to Natural Gas NG=F confirms how aggressively the market has repriced the near-term narrative. The United States Natural Gas Fund (UNG), designed to track front-month Henry Hub futures, dropped about 6.5% to $12.27 in today’s session. Leverage magnified the move in derivatives products: ProShares Ultra Bloomberg Natural Gas (BOIL) sank roughly 11.8%, while the inverse ProShares UltraShort Bloomberg Natural Gas (KOLD) gained about 11.8%, a mirror reflection of the futures slide. On the corporate side, gas-weighted producers traded in sympathy with the commodity. EQT declined around 2.5%, Antero Resources roughly 2.7%, and Range Resources close to 3.0%, moves consistent with a repricing of 2025 cash-flow expectations under a lower strip. LNG exporter Cheniere was comparatively steady, reflecting its long-term, contract-driven revenue model, while pipeline operators such as Williams and Kinder Morgan slipped only about 0.2% and 0.5%, underlining the resilience of fee-based midstream businesses that monetize volumes rather than spot prices. The pattern across UNG, BOIL, KOLD and producers tells the same story as NG=F itself: today’s move is a sentiment reset driven by weather and storage headlines, not a collapse in structural demand.

Short-term trading lens for NG=F: weather models, EIA prints and the $3.47–$4.18 volatility band

On a trading horizon measured in days to a few weeks, Natural Gas NG=F is a weather and EIA tape. The key technical corridor runs from the December low near $3.467 up to this week’s high around $4.176. Inside that band, the immediate decision zone is the $3.822–$3.738 retracement pocket. A firm defense of that pocket, especially if tomorrow’s or next week’s storage data surprise with a stronger-than-expected draw, could trigger another upswing back toward the $4.00–$4.15 resistance band. A clean break below the lower edge at $3.738 followed by a loss of $3.64 and then $3.47 would instead confirm that the market is unwinding the entire late-December rally and re-pricing toward a looser winter balance. Cyclically, this time of year still leans supportive for Natural Gas because even small colder-than-normal windows can swing weekly withdrawals by tens of Bcf. However, the latest updates show a warm first half of January, and large speculators are clearly not interested in fighting that signal. Position squaring into year-end adds another layer of noise, as many funds close risk into December 31 and only re-enter on cleaner signals in early January.

Medium- to long-term NG=F outlook into 2026: LNG growth, modest price forecasts and a disciplined strip

Looking beyond this weather cycle, the medium-term path for Natural Gas NG=F into 2026 is shaped by three forces: steady production, expanding LNG capacity, and a disciplined price strip. The U.S. Energy Information Administration’s short-term outlook projects dry gas production averaging roughly 109 Bcf/d in 2026, only slightly below the December 2025 record near 110.1 bcfd. At the same time, U.S. LNG exports are expected to rise further as projects currently commissioning move to full run-rates and additional terminals come online later in the decade. NGI’s tracking shows feedgas flows already holding near 19 Bcf/d, with individual facilities such as Plaquemines running above nameplate and Sabine Pass lifting volumes. Globally, additional supply from the United States has allowed benchmark prices like TTF to retreat to pre-2022 levels even as storage coverage in Europe occasionally slipped below the five-year average, reinforcing the idea that the world can manage winter swings without panic bidding every cargo. Energy bank forecasts calling for Henry Hub around $3.43/MMBtu in 2026, combined with a backwardated curve through April and relatively flat long-dated averages, paint a picture of a market where Natural Gas remains cheap enough to compete with coal and support industrial use, yet high enough to justify ongoing drilling and pipeline investment. That setup favors volatility around weather and storage headlines rather than a one-directional bull or bear market.

Verdict on Natural Gas NG=F: buy-on-weakness bias with $3.45–$3.60 as accumulation and $4.20–$4.35 as risk-management zone

Putting the pieces together, today’s drop toward $3.70 in NG=F looks more like a weather-driven shakeout than the start of a structural collapse. Storage has tightened enough to push inventories below the five-year average, LNG feedgas near 19 Bcf/d continues to siphon supply offshore, and Henry Hub still trades at a heavy discount to the roughly $9.66 TTF benchmark. At the same time, a warm 8–15 day outlook, a soft 38 Bcf withdrawal versus a roughly 51 Bcf expectation, and strong production around 110.1 bcfd all argue that the market has room to probe lower support levels before the next leg higher. Against that backdrop, the most rational stance is a buy rating on Natural Gas NG=F with explicit discipline on entry and exit. The optimal accumulation band sits between about $3.45 and $3.60, where the December low near $3.467, the retracement pocket around $3.738 and the cluster of key moving averages near $3.64–$3.60 converge. Above, the $4.20–$4.35 region, anchored by the 50-day moving average around $4.152, the 50% retracement near $4.245 and the 200-day moving average around $4.348, defines a logical profit-taking and risk-management zone. A weekly close above that ceiling would upgrade the medium-term profile from tactical to outright bullish; a failure to hold the $3.45 floor would instead shift the focus to deeper support and force a reassessment of the rating. For now, the asymmetry between downside toward roughly $3.45 and upside back toward $4.20–$4.35 justifies treating current weakness as an opportunity rather than a reason to abandon Natural Gas.