A recent winter storm in the United States spurred high volatility in the natural gas (NG) market, sending prices to a nearly three-year high. The extreme weather impacted supply and demand simultaneously. On the one hand, low temperatures led to increased heating needs; on the other, they disrupted production due to freeze-offs at major gas fields. Despite its temporary character, this severe imbalance spiked prices in the most affected regions.
However, unlike the frozen water, time did not stand still. The situation began to change rapidly. As wells thaw, natural gas production is steadily recovering, with daily output rising for the third consecutive day. Temperatures are forecast to remain below seasonal averages until February 12, but they are now well above the extreme values recorded on January 24–25. Commodity Weather Group analysts predict milder conditions in Texas and Louisiana—key production regions—through the end of the month, which could lead to a noticeable drop in weekly demand.
Furthermore, US NG inventories are 6% higher than last year’s figures and seasonal averages. This surplus persists despite a significant withdrawal over the past seven days and a potentially record drawdown this week.
The technical picture confirms the fundamental shift. The NG price is now hovering near $4.990, with a strong bullish impulse on the daily chart. However, momentum indicators suggest that the current uptrend is losing steam. Therefore, a technical correction is likely. The Chaikin Oscillator has been declining since its January 26 peak, indicating that buying pressure is waning. Meanwhile, the Stochastic Oscillator is forming a bearish crossover, with both its lines turning downward—further evidence of fading bullish momentum.
Try out the trading strategy suggested below:
Sell NG at current levels. Place Take profit at $4.250. Set Stop loss at $5.460.
This forecast is valid between January 29 and February 5, 2026.
This content is for informational purposes only and is not intended to be investing advice.
