Natural Gas Price Forecast: Can the $3 Henry Hub Floor Survive Spring?

Natural Gas Futures Price – From Winter Spike To A Compressed $3 Trading Floor

Natural gas has flipped from a winter panic trade back into a grind at the lower end of the range. U.S. natural gas futures sit around $3.10 per MMBtu after dropping about 4.2% on the day and roughly 29% so far in February, wiping out almost all of the gains from the autumn 2025 rally and the late-January spike above $7–$7.50 triggered by Winter Storm Fern. The market has round-tripped from sub-$3 levels in late 2025 to a weather-driven blow-off high and back toward the same $3 zone, with price now pinned at a psychological floor rather than a structural top.

From Winter Storm Fern’s $7–$7.50 Panic To A 29% February Pullback

The late-January cold blast and storm-related disruptions briefly sent Henry Hub prompt prices toward roughly $7–$7.50 per MMBtu, but that move has been fully retraced. As winter risk faded, prompt Henry Hub collapsed back to roughly $3.10, erasing around 60% of the peak and close to 29% just in February. The drawdown has been aggravated by the fact that the January spike was almost entirely driven by short-term weather risk rather than a structural shortage. Once the freeze ended, the weather premium evaporated faster than producers could scale back drilling, leaving the curve exposed to a quick repricing lower.

Weather Flip: Milder Late-Winter Temperatures And Demand Erosion

The core driver of the current softness is the shift from Arctic conditions to a milder late-February pattern. Heating degree days in the U.S. are running about 9% below the 10-year average, and forecasts show mid-50s Fahrenheit (low-teens Celsius) readings in key demand centers instead of sustained sub-freezing temperatures. In Europe, German natural gas futures have dropped below €32 per MWh, a five-week low, as warmer and windier conditions across central and western Europe cut heating demand and boost wind generation. Germany’s temperatures are now projected to sit slightly above seasonal norms, removing the urgency that pushed prices higher earlier in the winter.

Production, Rigs And LNG – Why Supply Looks Heavy Into Spring

On the supply side, the U.S. has rebounded quickly from storm-related shut-ins. Lower-48 dry gas output is tracking near 107.9 bcf/d so far this month, about 1.5 bcf/d above the January average. Drilling in the Haynesville has re-accelerated: the rig count is up by roughly 10 units over the past month to about 52, around 10% above what the market would need this year to keep balances tight. That extra drilling pushes more molecules into a market already transitioning out of peak heating season. At the same time, LNG feedgas demand has recovered, and export growth remains a medium-term support with roughly 3.8 bcf/d of additional LNG demand expected in 2026, including the early-March start-up of the Golden Pass facility. The short term, however, is dominated by strong production and soft February consumption rather than the more constructive summer and multi-year LNG story.

Technical Map: $3 Floor, Gap Toward $3.50 And A Wall Of Resistance Up To $3.85

Technically, the chart is still damaged. Natural gas futures are trading below every major moving average: the 50-day EMA near $3.62, the 100-day EMA around $3.85, the 200-day EMA near $3.68, and the longer 200-day simple moving average around $3.83. This cluster between roughly $3.60 and $3.85 forms a dense resistance band above today’s $3.10–$3.15 prints. A popular trend-following indicator remains bearish around $4.45, confirming that the dominant medium-term bias is still down. The market has effectively completed a full loop from September 2025 lows near $2.90 to the January highs near $7.50 and back toward the same price zone, leaving $3 as the last meaningful technical support before the prior 2024 base. A long-term trendline anchored at 2024 lows around $2.60 currently intersects in the $3–$3.05 region. A decisive daily and weekly close below that area would be a structural break, opening a slide toward the $2.60–$2.80 band. Conversely, a bounce from $3 that fills the gap up toward $3.50 is highly plausible, but any move into the $3.50–$3.85 resistance zone is likely to attract heavy selling and hedging unless fundamentals tighten quickly.

Natural Gas Futures Price And Seasonality: Trading The $3 Floor Into The April Contract

The seasonal context matters. The market is about to roll into the April contract in roughly a week, which shifts positioning from winter heating risk to shoulder-season dynamics. With the freeze over and production normalized, storage injections and power burn expectations into late spring become the main drivers. Historically, this is not the part of the year where persistent upside trends are born unless there is a structural supply outage or an early heatwave. Right now, neither is visible at scale. For that reason, many experienced traders are treating $3 as a tactical support rather than a new launchpad. Short-term speculators may buy intraday dips at $3.00–$3.05 for quick pops toward $3.30–$3.50, but longer-horizon players are more inclined to fade strength into the resistance band rather than chase upside during the transition into the quieter part of the demand cycle.

Regional Storage Split: Pacific And Mountain Glut vs. Modest Lower-48 Deficit

Storage data paints a nuanced picture. At the national level, Lower-48 inventories sit at a deficit of about 5.5% versus the five-year average, suggesting that balances are not disastrously loose. Under the surface, however, the story is split. In the Pacific region, storage is roughly 35% above average; in the Mountain region, stocks are about 37.5% above norms. That oversupply explains why spot prices in those markets have slumped to 2026 lows. Regional bottlenecks, pipeline constraints, and limited takeaway options turn these areas into localized pressure valves, dragging down regional spot benchmarks even as aggregate U.S. storage looks only modestly tight. The result is a Henry Hub futures curve that trades off national balances, while physical markets in the West and Rockies clear at levels reflecting local oversupply.

Europe’s Natural Gas Futures: Germany At €32 With Sub-34% EU Storage

Across the Atlantic, the European picture is the mirror image: storage looks tight, but prices are falling because logistics and supply options are much better than they were in 2022. EU storage sits below 34% full, the lowest since 2022, and German storage is under 24%. Those numbers would have been alarming two winters ago; today they are manageable thanks to a steady stream of LNG cargoes and diversified pipeline flows. TTF and German futures sliding below €32 per MWh reflect warmer weather, strong wind output, and confidence that LNG deliveries will fill the gap created by reduced Russian flows. U.S. natural gas prices are at a four-month low, increasing export potential and keeping the transatlantic spread attractive enough to sustain robust shipments. The structural message is that Europe is no longer forced to pay any price for security of supply; the marginal barrel of LNG now caps local prices and aligns them more closely with global benchmarks.

Structural Demand Drivers: Spain’s Grid Shock And New West African Gas Supply

The long-term demand story is not bearish. Spain’s system operator has reported that gas-fired power generation surged about 33% last year, helped by events such as the April 28 blackout, with electricity exports to France up roughly 59%. Gas has become the stabilizer of last resort for the European grid, filling gaps when renewables fall short or when interconnectors are stressed. That sort of structural role is not going away, even in optimistic renewable scenarios. At the same time, upstream investment continues. A recent offshore discovery in Ivory Coast, with reserves estimated near 5.0 trillion cubic feet of gas and about 450 million barrels of condensate, illustrates the scale of long-cycle projects being sanctioned on the assumption that LNG demand will remain strong well into the next decade. These developments do not tighten balances today, but they confirm that producers and policymakers still see gas as a cornerstone of the transition, not a niche fuel that will disappear in a few years.

Macro Overlay: Weak Hydro, Power Burn And The Role Of LNG In 2026

Beyond Europe, the U.S. power sector is another quiet but important tailwind for gas. Weak hydro conditions in the western U.S. are expected to lift gas-fired power demand by roughly 0.5 bcf/d this summer. Layer that on top of the projected 3.8 bcf/d of incremental LNG feedgas demand in 2026, and the medium-term balance looks tighter than today’s depressed price suggests. The issue is timing. That extra power burn and LNG pull arrive gradually as the market exits shoulder season, meaning the next few weeks can still be dominated by bearish headlines about storage, mild weather and high output even as the forward curve starts to anticipate stronger summer fundamentals.

Cross-Asset Context: Risk-On Equities While Natural Gas Lags

Risk assets elsewhere are not signaling crisis. U.S. equities are firm, with large-cap tech again leading. Apple (trading near $265.78, up roughly 3.9% on the day) is one of the best performers, helping pull the Nasdaq higher while volatility indexes ease. That risk-on tone in stocks matters because it shows that the gas selloff is not part of a broader liquidation across assets; it is primarily a sector-specific repricing after weather risk came out of the strip. For natural gas futures, this means there is no forced macro selling from systematic allocators at the moment, but there is also no rush of cross-asset capital hunting for “safe haven” exposure in energy. Gas must stand on its own fundamentals: local oversupply in the West, strong overall production, milder weather, but improving structural demand from LNG and power.

Trading View: Short-Term Bearish, Medium-Term Constructive – Natural Gas Futures Price Buy, Sell Or Hold?

Putting it all together, the picture is clear: short-term momentum is still bearish, but the tape is approaching levels where longer-term bulls will begin to accumulate. Price has fallen to around $3.10, below every key moving average and just above a long-term trendline tied to 2024 lows near $2.60. Weather has turned against the bulls, storage in the Pacific and Mountain regions is 35–37.5% above average, and production around 107.9 bcf/d is simply too high for February demand. At the same time, EU storage below 34%, German storage under 24%, a five-week low around €32 per MWh in German futures, a 33% surge in Spanish gas-fired generation, a 59% jump in exports to France, weak hydro that could add roughly 0.5 bcf/d of U.S. power burn, and LNG demand growth of roughly 3.8 bcf/d in 2026 all point to a more supportive structural backdrop once the market gets past the immediate seasonal drag. The key technical levels are straightforward. On the downside, the $3.00–$3.05 zone is the pivot; a clean weekly break below exposes $2.80 and then $2.60–$2.70. On the upside, $3.50 is the first logical target for any bounce, with a heavy resistance band stretching from roughly $3.60 to $3.85 where the 50-, 100- and 200-day averages cluster. Unless the fundamental picture tightens rapidly, rallies into that band are likely to be sold by producers and short-term traders who miss the January exit. Based on the data, the most rational stance is a Hold with a short-term bearish bias. The tactical trade is to sell strength toward $3.50–$3.80 and only shift to an outright long bias if price either capitulates into the $2.60–$2.80 area while LNG and power-burn demand materialize, or reclaims and holds above the $3.85 resistance band with evidence that production growth is slowing. Right now, natural gas is not a compelling high-conviction Buy at $3.10, but it is also too close to long-term support and too cheap relative to the medium-term demand outlook to justify a fresh aggressive Sell.

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