Natural Gas News: Futures Target $3.330 Amid Mild Weather and Lower Demand

Natural Gas Futures Slide as Weather and Technicals Pressure Prices

U.S. natural gas futures took a steep dive on Tuesday, signaling further downside risks as both technical and fundamental factors weigh heavily on the market. With mild weather forecasts for February and critical support levels in focus, traders are eyeing near-term price action with caution as the February contract approaches expiry.

At 16:31 GMT, Natural Gas futures are trading $3.522, down $0.175 or -4.73%.

Is $3.330 the Next Target for Natural Gas Prices?

The daily chart highlights bearish momentum, with natural gas futures targeting the $3.330 minor bottom. The next key level of interest lies at the 50-day moving average at $3.275, a significant technical marker. A potential bounce may occur at this level, but failure to hold could trigger further selling pressure, driving prices toward the 200-day moving average at $3.038. This critical support, if breached, would signal a shift to a longer-term downtrend, raising the stakes for traders watching these levels closely.

Weather Forecasts Weigh on Demand Outlook

Weather remains a headwind for natural gas prices this week. NatGasWeather reports that while a chilly system will bring snow and sub-freezing temperatures to the Midwest and Northeast, much of the U.S. will experience mild conditions with highs in the 40s to 70s. A milder weather system is also tracking across the southern U.S., further tempering demand. Looking ahead, a frosty system could hit the Pacific Northwest and Mountain West by the weekend, but overall demand is expected to remain moderate for much of the week.

Market Forecast: More Downside Ahead

The combination of weakening technical indicators and softening demand forecasts suggests a bearish short-term outlook for natural gas prices. Should the February contract fail to hold above $3.275, the likelihood of a further slide toward the $3.038 mark increases significantly. Mild weather expectations for February amplify the downside risks, as lower heating demand could keep pressure on prices even beyond the prompt month transition.

Traders should monitor technical levels and weather-driven demand forecasts closely, as the next few sessions could set the tone for broader market direction.

More Information in our Economic Calendar.