Natural Gas News: 10-15 Day Weather Forecast to Drive Market This Week

Volatility Strikes as Storage Reports and Weather Shifts Rock Market

Natural gas futures were sharply lower last week after giving back early gains. The volatility in the market was fueled by two U.S. government storage reports just days apart and a shift in the weather forecast for early January.

Last week, February Natural Gas futures settled at $3.618, down $0.259 or -6.68%.

Storage Whiplash: From Deficit to Surplus in 48 Hours

The holiday-shortened week began with a spike to the upside after the Energy Information Administration (EIA) report released on Monday flipped the surplus versus the five-year average to deficit. That positive news didn’t last long because on Wednesday, the EIA reported a below-average, below-estimate 38 Bcf draw for the week ending December 26. Prices fell on this news because it put inventories back above the five-year average.

Technical Picture: Downtrend Dominates

Technically, the main trend is down according to the weekly swing chart and the 52-week moving average.

The swing chart shows the main top at $5.022 and the main bottom at $3.467. Its retracement zone at $4.245 to $4.428 is a potential resistance zone. Last week’s rally to $4.176 was essentially stopped by this area.

A trade through $3.467 could target longer-term support at $3.248.

Key Resistance Levels Ahead for Bulls

The longer-term range is $5.551 to $3.467. Even if buyers break out over the 52-week moving average at $4.402, which is traditional resistance, traders are likely to face new resistance inside the retracement zone at $4.509 to $4.756 as well as the main top at $5.022.

Weather Patterns Hold the Key to January’s Direction

Looking ahead, the weather will dictate the next major move in natural gas. The chill the U.S. experienced over the start of the new year was expected to last through the weekend and end around January 6, leading to regionally strong demand. Most of the country is expected to be mild to warm until at least next weekend. This could lead to very light demand for the period.

While early January weather is expected to cap gains, cold is forecast for the second half of the month. Traders should watch for new 10-15 day weather reports next week because that is what professionals use to assess supply and demand risk.

LNG Exports Provide Critical Floor Under Prices

Weather and storage levels seem to be the main factors driving the short-term volatility, but longer-term traders are monitoring U.S. liquefied natural gas (LNG) exports. LNG is responsible for putting a floor under the market, in my opinion.

According to a report from OilPrice.com, “U.S. LNG exports set new records in 2025 as new capacity came online and existing terminals ran at high utilization, pushing annual shipments past levels previously thought years away.”

“Preliminary data from LSEG show the United States exported 111 million metric tons of LNG last year, making it the first country to surpass the 100-million-ton threshold in a single year.”

The Week Ahead: Warm Start, Cold Finish

To recap, with weather dictating short-term volatility, we expect several days of warmth following the current chilly weekend. However, conditions are expected to change for the January 13-20 period. This pattern “will dictate how prices trade at the Sunday reopen,” according to NatGasWeather.com.

More Information in our Economic Calendar.