Natural Gas News: Bearish Market as China’s Tariffs Hit U.S. LNG Exports

Will China’s Tariffs Weigh on U.S. Natural Gas Prices?

U.S. natural gas futures are slipping lower on Tuesday, giving back Monday’s gains and trading within the prior session’s gap. Traders are closely watching key technical levels while weighing demand forecasts and the impact of China’s latest retaliatory tariffs on U.S. energy exports.

At 14:12 GMT, Natural Gas Futures are trading $3.193, down $0.159 or -4.74%.

Key Technical Levels Could Determine the Next Move

The short-term price range sits between $4.020 and $2.990, with the 50% retracement level at $3.505 acting as a key resistance point. Monday’s rally came up short of this level, preventing a breakout.

On the downside, immediate support is found near the 50-day moving average at $3.012, with an additional support cluster at Friday’s low of $2.990. If that level breaks, prices could test a longer-term pivot at $2.932. The most significant support remains at the 200-day moving average at $2.700, which could serve as a major floor if bearish momentum intensifies.

Weather Models Shift Colder, but Demand Remains Light

Weather forecasts from NatGasWeather for February 3-9 indicate a cold pattern across the northern third of the U.S., with temperatures plunging into the -0s to 30s. However, the southern two-thirds of the country will remain mild, keeping overall national demand light.

Over the weekend, both the GFS and EC weather models trended colder, adding 20-25 HDDs (heating degree days), which initially fueled Monday’s price surge. However, the market has since erased those gains, suggesting traders remain skeptical that weather-driven demand will be strong enough to push prices higher in the near term.

China Strikes Back with Tariffs on U.S. LNG and Coal

China has announced a 15% tariff on U.S. liquefied natural gas (LNG) and coal, effective February 10, in response to President Trump’s new tariffs on Chinese goods. While this move doesn’t directly impact the domestic natural gas market, it raises concerns over global LNG demand and could dampen U.S. export growth.

China is the world’s largest LNG importer, and any reduction in demand for U.S. LNG could pressure prices, particularly as global markets are already dealing with strong supply levels. The tariffs also come at a time when mild weather in Asia is keeping spot LNG prices under pressure.

Market Outlook: Downside Risks Growing

With resistance holding at $3.505 and weak demand keeping a lid on prices, the near-term outlook leans bearish. While colder weather trends could offer some support, they are not yet enough to drive a sustained rally.

China’s tariffs add another layer of uncertainty, potentially weighing on U.S. LNG exports and reinforcing downside risks. If support at $2.990 breaks, a test of $2.932—and possibly $2.700—could be in play. Unless demand surprises to the upside, the market remains vulnerable to further declines.

More Information in our Economic Calendar.