Natural Gas News: Colder Weather and Russia Tensions Propel Futures Towards $3.044

Futures Surge as Colder Weather and Geopolitical Tensions Mount

U.S. natural gas futures climbed sharply on Monday, breaking resistance at $2.825 and turning it into a key support level. Bullish traders are eyeing the next resistance zone at $3.043-$3.044, marked by the 50-day moving average and a 50% retracement level. A sustained move above $3.044 could propel prices toward targets at $3.136 and $3.168, representing a key Fibonacci level. However, traders are wary, as the rally appears driven by short-covering rather than a fundamental demand surge.

At 13:10 GMT, natural gas futures are trading $2.897, up $0.074 or +2.62%.

Weather Patterns Fuel Speculative Moves

The rally coincides with forecasts of colder weather across the U.S., potentially increasing heating demand. Rain and snow systems are expected to impact large portions of the country, excluding the Southwest, during Thanksgiving week. Over 25 million people are under winter storm watches, with notable snowfalls forecast for the Midwest, Northeast, and central Appalachians. In the Pacific Northwest, a powerful atmospheric river event is set to bring heavy rain and snow, potentially disrupting supply chains and bolstering natural gas usage.

The National Weather Service predicts colder air and accumulating snow across key demand regions, heightening the possibility of increased natural gas consumption. A developing winter storm in the mid-Atlantic and southern New England could add to energy demand during one of the busiest travel periods of the year.

Geopolitical Uncertainty Adds to Price Volatility

Meanwhile, geopolitical tensions are adding upward pressure to natural gas prices. Over the weekend, Russia’s Gazprom ceased supplies to Austria after a payment dispute. Austria, historically reliant on Russia for up to 98% of its natural gas, claims it has adequate reserves to meet winter demand. The EU continues to navigate energy insecurity, relying heavily on liquefied natural gas (LNG) imports from the U.S. and Qatar to offset reduced Russian supply.

Market Forecast

In the short term, U.S. natural gas prices are likely to remain volatile. A bullish breakout above $3.044 could trigger further gains, driven by weather-related demand and geopolitical uncertainties. However, traders should monitor resistance levels and signs of fundamental demand to gauge the rally’s sustainability. A failure to hold above $2.825 may signal a bearish reversal.