Natural Gas Slips as Bulls Lose Grip Near $4 – Is the Rally Already Fizzling?
Natural gas futures are softening Monday after an early rally ran out of steam just shy of a key resistance level. January contracts touched $4.140 in early trade, teasing a breakout above last week’s high, but sellers quickly regained control, dragging prices back toward $3.95. With expiration pressures mounting and weather models offering mixed signals, traders are left trying to sort out if this move has legs — or if the rally’s done for now.
At 14:30 GMT, January Natural Gas futures are trading $3.905, down $0.079 or -1.98%.
Was That the Last Pop Before Expiration?
Early strength was fueled by short-covering as traders adjusted positions ahead of the January contract’s expiration. A minor bump in heating degree days (HDDs) for early January also helped spark a push above Friday’s highs. But the move stalled just under $4.218 — last week’s swing top — and bulls couldn’t force a breakout. Price reversed lower, suggesting the short-covering may have run its course without real fundamental backing.
Technically, a decisive close above the 50-day moving average near $4.447 could have opened the door toward the next resistance band at $4.668–$4.672. Instead, the market is now probing downside territory between $3.913 and $3.840 — the lower end of last week’s range. If support doesn’t hold here, bears could push toward the $3.780–$3.538 zone.
Colder Outlook? Not Convincing Traders Yet
While some models show a slightly cooler start to January, it’s hardly game-changing. NatGasWeather called for above-normal temperatures across most of the U.S. through December 25, with only limited cold focused in the northern Plains and Midwest. The National Weather Service echoed that sentiment, pointing to a general warming trend through New Year’s, especially in the snow-covered Midwest.
Bottom line: winter demand expectations just aren’t gaining traction. Short bursts of cold aren’t enough to offset the broader warmth narrative, and that’s keeping bulls in check.
Natural Gas Price Forecast
Every new Natural Gas analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all Natural Gas forecastsStorage Draw Impressive — But Market Yawns
The latest EIA report showed a larger-than-expected draw of 167 Bcf, pulling total storage to 3,579 Bcf. That’s now 61 Bcf below last year and 32 Bcf above the five-year average. On paper, it’s a supportive number. But with weather and supply dominating sentiment, the market barely blinked. Traders appear to view the draw as a seasonal adjustment — not a shift in the bigger supply/demand equation.
Short-Term Outlook: Bearish Unless Bulls Reclaim $4.218
The bounce attempt looks shaky. Unless buyers step in with size and break above $4.218 soon, pressure likely builds toward the $3.84–$3.78 support zone. Expiration-related noise may continue, but fundamentals — warm weather and strong production — still lean bearish. Traders fading rallies are back in control for now.
More Information in our Economic Calendar.