Natural Gas Price Forecast: NG=F Tests $3.56 200-Day Support as Bears Target $3.47

Natural Gas (NG=F) Tests $3.56–$3.62 As Bears Push Into 200-Day Support

Henry Hub Front Month Slips 1.84% To $3.618/mmBtu As Futures Hit 2.25-Month Low

Front-month U.S. natural gas (NG=F) for February delivery finished at $3.618 per mmBtu, down 1.84% on the session and extending the slide to a 2.25-month low around $3.56. That $3.56 print is the first meaningful retest of the 200-day moving average since it was reclaimed in late October. Intraday price action showed buyers stepping in near that long-term line, confirming it as dynamic support for now, but the close below $3.68 locks in a fresh trend low and keeps the correction firmly intact. The move filtered straight into listed products: the United States Natural Gas Fund (UNG) closed at $12.06, down 1.63%, while upstream gas producers were mixed, with EQT at $53.46 (-0.25%), Antero Resources at $34.21 (-0.68%) and Comstock Resources at $23.58 (+1.73%). LNG-exposed names outperformed: Cheniere Energy ended at $197.80 (+1.75%) and Venture Global at $7.04 (+3.37%), highlighting how a weak domestic strip can coexist with a structurally strong export story.

Warm Mid-January Outlook Erodes Heating Demand, HDDs And Storage Draws

The dominant fundamental driver for natural gas into next week is weather, and the tape is trading that reality. Forecasts show warmer-than-normal temperatures across the eastern two-thirds of the U.S. for January 7–11, with the warmth expanding across the north-central region from January 12–16. Heating degree days, a key demand proxy, have already dropped from about 413 midweek to roughly 369, signaling that fewer incremental BTUs are needed to heat buildings just as the market enters what should be peak winter demand. Storage data confirms the demand shortfall. The latest weekly report showed a 38 bcf withdrawal for the week ended December 26, versus expectations around 50 bcf, last year’s 112 bcf draw for the same week and a five-year average near 120 bcf. That undershoot means inventories are only about 1.1% below last year but approximately 1.7% above the five-year seasonal norm, a comfortable cushion for this point in winter. European storage sits near 62% versus a five-year average around 74%, another sign that the system is not under acute stress. With weather models skewing warm and storage draws lagging historical benchmarks, the immediate backdrop for NG=F remains fundamentally bearish.

Record Output Above 110 bcfd And LNG Flows Near 19–20 bcfd Keep Supply Heavy

On the supply side, the numbers are unambiguous. Lower 48 natural gas output in December was estimated around 110–110.1 bcfd, a fresh monthly record and above the 2025 production forecast near 107.74 bcfd. Daily dry gas output sits near 110.0 bcfd against total Lower 48 demand around 101.0 bcfd, leaving a visible surplus that has to be absorbed by storage or exports. LNG is doing heavy lifting: flows to U.S. LNG export plants have been running roughly 18.5–19.6 bcfd, and the U.S. shipped about 111 million metric tons of LNG in 2025, up roughly 24% year-on-year and making it the first country to cross the 100-million-ton threshold. Additional U.S. export capacity on the order of 20 million tons per year is slated to come online in 2026, extending the structural pull from overseas buyers. Domestic power burn is a partial offset to the mild weather drag. Lower-48 electricity output in the week ended December 6 rose 2.3% year-on-year to about 85,330 GWh, and generation over the past 52 weeks is up roughly 2.84%, supporting gas demand for power even as heating load softens. Net, though, record production, strong associated gas and robust LNG flows still leave NG=F dealing with an oversupplied near-term balance.

Technical Structure: 200-Day Average At $3.56, With Fibonacci Targets At $3.45 And $3.26

The selloff from the December peak near $5.50, a three-year high for natural gas, has been impulsive rather than orderly. Price broke below the 20-day moving average first, then sliced under the 50-day, with both lines flipping from support to resistance on subsequent pullbacks. Resistance near the 20-day was tested and confirmed about a week ago, and a later rebound failed just below the 50-day, setting up Friday’s new trend low at $3.56. That $3.56 area roughly coincides with the 200-day moving average, making it a pivotal test of whether this correction is a pause in a larger uptrend or the start of something deeper. From a retracement standpoint, the 78.6% Fibonacci level of the rally leg sits near $3.45. A clean break of $3.56 that accelerates toward $3.45 would signal that the 200-day is failing on the first test. Harmonic projections paint an even lower potential target: if the second leg down (CD) extends to 78.6% of the initial downswing (AB), the pattern points toward roughly $3.26. On the upside, any bounce that clears Friday’s high around $3.70 would be the first sign of short-term strength, but it would still sit inside a bearish structure as long as NG=F remains capped near the falling 10-day average around $4.03 and the recent swing high near $3.98.

Weather Vs. Venezuela: Risk Premium For NG=F Remains Capped

The U.S. strikes on Venezuela and the reported capture of Nicolás Maduro have reintroduced geopolitical headlines into the energy complex, but natural gas is not trading like the primary risk asset in this story. The Venezuelan shock matters most for crude, refined products and the broader risk complex; early assessments show state producer PDVSA’s oil and refining operations intact with no immediate hit to output. For NG=F, the impact is indirect: higher oil prices can tighten the broader energy risk premium, alter hedging behavior and influence cross-asset flows into energy ETFs, but they do not materially change U.S. gas balances while domestic temperatures are running warm and storage is running above the five-year norm. The market is effectively saying that weather and storage trump geopolitics in the near term. If the Venezuela situation were to escalate into sanctions or infrastructure damage that ripples through global LNG flows or shipping lanes, the story for natural gas would change quickly; at this point, the tape is not pricing that scenario as its base case.

Forward Curve And Official 2026 Path: Market More Bearish Than $4.30 Winter Average

Longer-dated expectations underscore the disconnect between official forecasts and current pricing. Projections for Henry Hub spot suggest an average near $4.30 per mmBtu across the November–March winter window, easing toward roughly $4.00 across full-year 2026 as additional production comes online and early-year weather moderates. By contrast, the front of the curve is sitting at $3.618 with spot testing the low-$3.50s, implying that traders see more downside risk in the near term than the baseline forecast. As long as draws remain as soft as the recent 38 bcf print and models keep pushing warmth out to mid-January, the market has little incentive to pull the strip up toward that $4.30 winter average. A sequence of colder revisions, stronger heating-driven withdrawals or an unexpected hit to output would be required to close that gap and re-price NG=F toward the official path.

Flows And Positioning: UNG, LNG Plays And Pipelines Signal A Split Tape

Market plumbing paints a nuanced picture around natural gas risk. UNG, which tracks near-dated Henry Hub futures, is down to $12.06 after a 1.63% decline, mirroring the futures slide and reflecting retail and ETF-driven pressure on the front month. Gas-heavy producers like EQT at $53.46, Antero at $34.21 and Comstock at $23.58 are softer but not breaking, suggesting that equity investors are treating the move as a correction rather than a structural break in the story. LNG-linked names tell a different story: Cheniere at $197.80 (+1.75%) and Venture Global at $7.04 (+3.37%) are trading like the long-duration winners from the U.S. export build-out, more sensitive to the 111-million-ton export base and the additional 20 million tons of capacity slated for 2026 than to a single week of mild U.S. weather. Pipeline operators Energy Transfer and Kinder Morgan, up 0.61% and 0.80% respectively, sit in the middle: their revenues are tied to volumes and contracts rather than outright price, but they benefit from a structurally active gas grid. The equity tape as a whole is telling NG=F traders that the structural story for gas infrastructure and exports remains intact, even as the commodity resets lower in the short term.

Tourmaline Oil As A Proxy: How Gas-Levered Equities Digest NG=F Volatility

Tourmaline Oil, a leading Canadian gas-levered producer, is a useful barometer for how the equity side is absorbing natural gas volatility. The stock now trades in the mid-60s Canadian dollars, down from a recent 52-week high in the low-70s but well above the 52-week low in the low-50s. Over the past year, that range translates into a price gain on the order of 35–40% before dividends: an investor who put C$10,000 into the name around the high-40s a year ago would now be sitting on roughly C$13,500–C$14,000, excluding the company’s variable and special payouts. The recent drift off the highs looks more like a controlled consolidation than a breakdown: intraday rallies are being sold, but closes are not collapsing, and the stock remains in the upper third of its 52-week band. Street targets for Tourmaline cluster in the low- to mid-70s, and coverage remains broadly in the buy/overweight camp, emphasizing low costs, balance sheet strength and leverage to higher-for-longer gas prices. That setup implies that equity investors still believe in a medium-term recovery in NG=F, even if the front month tests deeper support zones first.

Key Trading Levels: $3.47, $3.45 And $3.26 Below; $3.70, $3.98 And $4.03 Above

For traders in NG=F, the map is now well defined. On the downside, the first reference is the pre-Christmas low around $3.47, just below the current 200-day test. Beneath that, the 78.6% Fibonacci retracement of the prior rally sits near $3.45, a level that lines up with several technical and psychological anchors and will be treated as a critical support zone if $3.56 gives way. A deeper extension of the second leg down would put the harmonic target around $3.26 in play, where the CD leg reaches 78.6% of the initial AB decline. On the upside, a push through Friday’s high at about $3.70 would be the first sign that dip-buyers are willing to engage, but the real test comes closer to the falling 10-day average near $4.03 and the recent swing high around $3.98. As long as natural gas trades below that $3.98–$4.03 resistance band, rallies are technically corrective within a broader downtrend rather than evidence of a new bullish phase.

Natural Gas (NG=F) Stance: Hold With Short-Term Bearish Bias, Buy Zone Only Deep Into $3.45–$3.26

Pulling the strands together, natural gas (NG=F) sits at a point where long-term support and short-term headwinds collide. Price is pressing the 200-day average around $3.56 with warm weather, soft storage draws, record output above 110 bcfd and a production forecast near 107.74 bcfd all arguing for more downside toward $3.47 and potentially the $3.45 Fibonacci level. At the same time, structural LNG demand, a 2026 Henry Hub average path clustered around $4.00–$4.30 and the resilience of gas-levered equities like UNG’s underlying producers and Tourmaline Oil argue against calling a full-blown top at current levels. On balance, that mix supports a Hold stance on NG=F around $3.56–$3.62: tactically, the risk/reward still favors selling strength below roughly $3.70 while warm forecasts and small withdrawals persist, but the high-conviction long opportunity only opens if the market flushes into the $3.45–$3.26 band and the fundamental backdrop starts to tighten. Until then, natural gas trades as a short-term bearish, medium-term constructive Hold rather than a clean Buy or outright Sell.

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