Selling natural gas amid milder weather and higher production

Following a recent plunge from January highs, natural gas (NG) quotes are now consolidating near a four-week low. At the time of writing this forecast on February 12, 2026, futures prices for March are trading at $3.650. After reaching a three-year peak of $5.665 on January 28, a surge driven by the cold Arctic cyclone, the asset’s value fell by 35%.

The daily chart shows a clear downtrend. The current price is well below the middle Bollinger Band ($4.275), revealing bearish sentiment. The Chaikin Oscillator, despite still being in the positive zone, has been declining since February 5. This means that buying interest is fading.

Meanwhile, the Relative Strength Index (RSI) is now sitting at the 32 level, close to oversold territory. So, a short-lived upward correction may take place. However, the indicator could remain in this zone for a long time, without any attempts at a reversal, if the downtrend proves to be strong. On the other hand, temporary consolidation may ease the overheated market.

Fundamentally, forecasts of atypically milder weather in the second half of February are the main causes of the current slump. According to meteorologists, temperatures across almost all of the US will be above average levels until February 26, dampening heating demand. Moreover, gas output increased this month compared to January figures. The Energy Information Administration (EIA) also raised its NG production outlook for 2026 to 109.97 billion cubic feet per day. Higher supply and weaker demand create a classic bearish environment.

However, there are several factors that could limit the decline. Gas flows to US LNG terminals reached a record 18.5 billion cubic feet per day in February. Robust exports are absorbing significant volumes from the domestic market, thereby supporting prices.

Keep in mind the trading plan presented below:

Sell NG at current prices. Place Take profit at $3.150. Set Stop loss at $4.150.

This forecast remains relevant between February 12 and February 19, 2026.