Natural Gas Forecast for Q2 2025 – $4.50 Resistance Unlikely to be Broken

Ultimately, most of what you see on a natural gas chart comes down to what is going on in America and its weather. After all, what most retail traders miss is that they are trading in the Henry Hub contract. In other words, it comes down to delivery in Henry, Louisiana. While some of that natural gas does go to other parts of the world, especially Asia, the reality is that most of it ends up staying in the United States, especially to the northeastern part to heat and power cities like New York, Pittsburgh, Washington DC, etc.

Technical Analysis

Up until now, the technical analysis for natural gas has been very strong and bullish, but the market has got absolutely hamstrung at the $4.50 level, to turn around and show signs of weakness. As I am writing this piece, we have formed two very negative candlesticks on the weekly chart, and it looks like we could very well form a third one. This brings me to my point here, because we had recently peaked quite drastically, but then got slammed so hard that it now looks like the markets are focusing on the fact that temperatures in the United States is starting to warm up, which means there will be less demand for heating.

Another thing that I would keep in mind is that the situation in Europe isn’t exactly clear right now, because there are questions to be asked about whether or not the Russians will continue to supply gas in the future. My thought is that sooner or later, Russian gas will start to flow heavily into central Europe, because quite frankly the Europeans can either do that, or pay very expensive shipping cost for LNG to come from the United States.

Quite frankly, it just doesn’t make sense, and it is worth noting that during the Ukraine conflict, we have still seen Russian gas going into the European Union. In other words, a lot of the rhetoric about Russian gas is just simply theater. Here is a fun fact: the European Union has spent more money on Russian gas during the war in Ukraine than they have supporting the Ukrainians. Money talks, people lie.

With that being said, I think between the temperatures rising in the United States and Europe, and of course sooner or later somebody is going to need to come to a conclusion in the Ukraine war, it is only a matter of time before we see markets start to fall. While I do recognize that inflation will keep prices elevated a little higher than usual, I suspect that the cyclical trade of natural gas falling into the summer is still what most traders will be looking for.