Natural Gas News: Will Futures Rally Further or Face Reversal? Key Levels to Watch

Will Natural Gas Futures Extend Gains After Hitting a Two-Year High?

U.S. natural gas futures are trading slightly lower but remain within yesterday’s range after hitting a multi-month peak of $4.551. The price action signals investor indecision, with traders weighing geopolitical risks, shifting weather patterns, and storage deficits. A breakout above $4.551 could extend the rally, targeting $4.714 and $4.805, while support lies at $4.147, with a key technical floor at $3.742.

At 14:26 GMT, Natural Gas is trading $4.341, down $0.009 or -0.21%.

Trade Policy Uncertainty and Supply Concerns Fuel Buying

The latest surge follows a 50-cent jump over two sessions, driven by renewed short covering and geopolitical tensions. The market reacted sharply to President Trump’s new tariffs on Canada, China, and Mexico, with traders bracing for potential retaliation. However, the administration’s suggestion of a possible compromise has added further uncertainty.

Meanwhile, U.S. storage deficits remain a key driver. With a shortfall exceeding 250 Bcf and no significant improvement expected in the near term, the tight supply outlook is keeping prices elevated. Additionally, Canada has cut exports to the U.S., further tightening domestic supply, while strong LNG exports continue to provide underlying support.

Weather Forecast Provides Mixed Signals

The latest NatGasWeather forecast shows a volatile pattern through mid-March. While strong systems are expected to bring rain and snow, temperatures will fluctuate widely. The southern and eastern U.S. will see milder conditions with highs in the 50s-80s, reducing overall demand. However, colder temperatures in the north could prevent significant storage recovery, maintaining a moderately supportive backdrop for prices.

Market Forecast: Upside Potential Hinges on Key Resistance

Natural gas futures remain at a crossroads. A decisive break above $4.551 could push prices toward $4.805, with strong momentum favoring the bulls. However, the market remains highly sensitive to shifting weather models and trade policy developments. If prices fail to hold above $4.147, a deeper pullback toward $3.742 or even the 50-day moving average at $3.511 could follow. Traders should monitor tariff negotiations and storage reports closely as key drivers in the coming sessions.

More Information in our Economic Calendar.