Key Moments
- Natural gas futures have hovered near a critical support zone since late December 2025, with cold risks into mid-February limiting upside.
- Restricted gas supplies to U.S. power plants contributed to generator outages and higher spot prices, according to PJM. Ukraine also faces mounting energy strains amid a harsh winter.
- February futures expired on January 28 at a premium to March. Prices then tested and fell below the 200 EMA at $3.783, attempting to stabilize above support near $3.164-$3.614.
Winter Weather and Geopolitical Backdrop
Natural gas futures are trading at a crucial level. Cold weather risks through mid-February are expected to cap gains, even as contracts hold near key technical support.
U.S. and European policymakers are increasingly concerned. Hundreds of millions in U.S. energy aid pledged to Ukraine remain undelivered, while a severe winter strains Ukraine’s already damaged power grid.
U.S. Power Markets and Supply Constraints
Restricted natural gas flows have driven generator outages and pushed spot prices higher. PJM, which oversees electricity transmission for 67 million people across 13 U.S. states and D.C., highlighted these constraints as a key market driver.
Meanwhile, production in the Lower 48 has rebounded, but futures have not eased significantly. The market remains focused on strong winter demand.
Weather-Driven Demand Outlook
Very cold conditions will persist across the Midwest and eastern U.S. through the weekend, with lows in the -20s to 20s and highs between 0 and 30 degrees. Texas, the South, and Southeast will see lows in the 10s to 30s. The western U.S. will remain milder, with highs in the 40s-70s.
Milder temperatures are expected next week. National demand should stay high through the weekend before moderating.
Futures Curve and Key Technical Levels
February futures expired on January 28 at a premium to March. The March contract initially held the 200-day EMA at $3.783 on January 29.
On January 30, prices climbed to $4.414, trying to break the 50 EMA at $4.251. However, a gap-down on Monday pushed futures below both the 50 and 200 EMAs. Prices then tested support at $3.164-$3.614.
| Date / Level | Price / Indicator | Comment |
|---|---|---|
| January 28 | February contract expiry | Expired at a premium to March |
| January 29 | 200 EMA at $3.783 | March contract held at this support |
| January 30 | High at $4.414 | Attempted to pierce 50 EMA at $4.251 |
| Following Monday | Below 200 EMA at $3.783 | Gap-down indicated strong selling |
| Current focus | Support at $3.164-$3.614 | Market watches for rebound |
Short-Term Technical Structure and Market Sentiment
On the 1-hour chart, natural gas futures show uncertainty. Bearish crossovers formed as the 9, 20, 50, and 100 EMAs fell below the 200 EMA. Futures are now trading under the 9 EMA at $3.742.
Still, a rebound could push prices above the 200 EMA if support holds near $3.614. Immediate downside is around $3.164, where strong buying interest may appear.
Risk Management Reminder
Trade carefully and manage risk in natural gas futures. Monitor market signals, stay informed, and act according to your risk tolerance. Effective decision-making is key to success in this volatile market.
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