U.S. natural gas futures are seeing mixed performance on Wednesday, leaning slightly higher as traders assess the demand impact of unusual weather conditions. Snowfall in Florida and a lingering Arctic blast in the Gulf and southeastern U.S. are keeping the market volatile. However, forecasts for warmer temperatures next week could limit upside potential unless new weather data suggests colder trends.
At 14:25 GMT, Natural Gas is trading $3.794, up $0.038 or +1.01%.
Recent price action indicates that the current cold spell was largely factored into prices weeks ago. NatGasWeather reports strong demand through Friday as lows range from -10°F to 20°F in the interior U.S. and 10°F to 30°F across Texas and the South. Demand is expected to ease into the weekend as temperatures rise to the 40s-60s across the southern and eastern U.S., with highs reaching the 70s in Texas.
If updated forecasts reintroduce colder temperatures, a short-covering rally could emerge. Key resistance levels are at $3.85 and $4.053. Sustained trading above $4.053 could indicate upward momentum, while a move below $3.85 might signal weakness, potentially leading to a decline toward $3.33.
Natural gas production, recently hindered by freeze-offs during the Arctic blast, is showing signs of recovery. Early February weather forecasts suggest a mild ridge forming over much of the southern and eastern U.S., limiting demand despite lingering cold in the Northern Rockies and Plains. This focus on milder February conditions contributed to selling pressure earlier in the week.
Traders remain cautious, balancing current weather-driven demand against expectations for higher production and milder conditions.
The market is also watching developments in liquefied natural gas (LNG) policy. President Donald Trump has lifted a freeze on new LNG export permit applications, reversing an earlier pause intended to study environmental and economic impacts. This policy shift could pave the way for several stalled projects in Louisiana and Texas, potentially doubling U.S. LNG export capacity by the decade’s end.
While this doesn’t immediately affect natural gas prices, expanded export capacity could tighten domestic supply and support prices in the future.
The natural gas market is likely to remain range-bound in the near term. Warmer forecasts limit the upside, but unexpected shifts toward colder weather could trigger short-covering rallies. Watch resistance at $4.053 for signs of bullish momentum. Conversely, a break below $3.85 would signal bearish sentiment, with downside risks toward $3.33.
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James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.