Natural Gas News: Futures Jump 10% Today on Cold Weather Forecast and LNG Demand

Natural Gas Surges on LNG Demand and Cold Snap Hopes — But Can It Hold?

U.S. natural gas futures surged over 10% on Tuesday, catching a late-year bid on record LNG export demand and weather model revisions pointing to colder air for the East Coast. The sharp rally pushed prices decisively above $4.218, tripping buy stops and turning short-covering into a momentum-driven push. As traders eye the 50-day moving average near $4.452, the question now is whether the rally has legs — or just caught weak shorts sleeping in thin holiday trade.

At 19:35 GMT, January Natural Gas Futures are trading $4.370, up $0.405 or +10.21%.

LNG Exports Set the Floor as Feedgas Hits Record Levels

LNG feedgas hit 18.6 Bcf/d on Tuesday, setting a fresh record as Cameron, Freeport, and Calcasieu all increased pull. That’s above November’s high-water mark of 18.2 Bcf/d and tightening balances despite warmer weather. U.S. gas is still pricing well below Asian and European benchmarks — with TTF at $9.47 and JKM at $9.59 — keeping export demand near full throttle. Bottom line: as long as global spreads stay wide, LNG will keep absorbing supply and giving bulls a reason to stay long.

Shorts Scramble as Cold Weather Adds Fuel

The rally started with weather — or rather, the lack of warmth. Traders latched onto fresh model runs adding some late-December cold for the East Coast. That’s not a full-blown Arctic blast, but in a thin market, it was enough to spark short-covering. Heating degree days (HDDs) were revised upward, but total demand still faces headwinds from a mild January forecast. Bottom line: the cold helped, but it’s not locking in sustained bullish fuel unless it deepens or lasts longer.

Production’s Still a Problem for Bulls

Here’s the caveat: supply isn’t blinking. Lower 48 dry gas output hit a new high of 111.1 bcfd in December — another blow to any bullish thesis built solely on weather. Even with rising demand, production is outpacing consumption, and Lower 48 inventories sit just 0.8% below the five-year average after a 172 bcf storage draw last week. That was steep — but not enough to erase bearish concerns over January’s expected surplus.

Can This Rally Stick Above Resistance?

Technically, the market’s flirting with key levels. Tuesday’s rally cleared $4.218, opening the door to a test of the 50-day moving average at $4.453. A decisive break there would target the $4.668 resistance zone, marked by both the 200-day moving average and 50% retracement. But if sellers show up near $4.452, this could turn into another failed winter rally — especially with warmer weather likely capping demand in early January.

Short-Term Outlook: Cautiously Bullish, But Watch the $4.45 Pivot

The market wants to rally — and has the story to do it — but production and weather remain wildcards. LNG demand is the strongest pillar here, but without a deeper cold shot or break above $4.452, bulls might run out of steam. If price clears that level with volume, a push to $4.668 is on the table. If not, expect sellers to reassert control heading into the new year.

More Information in our Economic Calendar.