NATGAS / Natural Gas Futures are currently experiencing increased volatility as US weather forecasts signal a significant shift towards colder temperatures, leading to significant price movements amid supply shortages and changing trading positions. After an impressive rally yesterday, the price has fallen slightly today.
► NATGAS ISIN: XD0002745517 | Ticker: NATGAS
Key NATGAS market statistics:
- Current Price: $3.82 (-3%)
- Daily High: $4,201 (52-week high)
- Previous session: +15%
- YTD performance: +58%
US weather dynamics
Updated forecasts from The Weather Co. and Atmospheric G2 predict below-average temperatures in January 2025 across the eastern United States from Florida to Maine. The peak of the cold snap is expected by the middle of the month, with AccuWeather warning of possible “significant snow and ice conditions.” This represents a significant deviation from the relatively mild autumn and early winter.
Meteorologists expect a significant cooling on the East Coast with a probability of almost 95%. These below normal temperatures are expected to last until at least mid-February. Source: Bloomberg Financial LP
Delivery and production risks
Industry analysts, including John Kilduff of Again Capital, are warning of possible “freeze-offs” that could disrupt natural gas production, particularly in the Marcellus shale region. This danger comes as storage levels have normalized to just 5% above the five-year average, well below the 40% excess seen last winter.
Trading and market sentiment
Algorithmic trading funds have shifted from “flat”-based (neutral positions) to net-long positions, reflecting growing bullish sentiment. The recent rise in the February futures contract marked the biggest one-day gain since its inception in 2012, underscoring the market’s sensitivity to weather-related demand expectations.
LNG export prospects
Additional demand pressure comes from expanding LNG export capacity as Cheniere Energy’s Corpus Christi and Venture Global’s Plaquemines facilities ramp up operations. This comes at a time when global LNG exports are recording their slowest growth since 2015, which could potentially support prices given the tight market conditions.
NATGAS Chart (Interval D1)
The price of the commodity is currently trading above the 61.8% Fibonacci retracement level. The RSI is cooling off after approaching overbought territory – a pattern that has anticipated potential bullish moves in the past. The MACD is showing a strong bullish divergence, reinforcing the possibility of continued bullish momentum.
The 30-day EMA is above the 23.6% Fibonacci retracement level and provides a strong support zone for bulls. For bears, this level could represent an important target and, if broken, could signal a possible trend reversal.
Source: xStation5 from XTB
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