Nat gas prices surged higher Tuesday as forecasts turned more bullish for mid February, boosting heating demand expectations. Further support stemmed from spec buying as Trump followed through with tariffs on all imports from Mexico, Canada and China. It was announced mid morning that tariffs on Mexico and Canada would be delayed for 30 days following negotiations. March futures settled 30.8 cents higher at $3.352.
Rising LNG feedgas demand has been supportive factor averaging 14.9 BCF/day for the first few days of February. LNG production at Plaquemines and the Corpus Christi expansion have contributed to near record volumes. Golden Pass is on track to start up later this year with expectations for the first LNG production during the second half of 2025. LNG export demand is forecast by Platts to rise 21% year over year and should exceed 19 BCF/day by 2026.
After falling yesterday to 31.3 BCF/day, its lowest since late December, res/comm demand has jumped higher this morning by 7.6 BCF/day to 41.2 BCF/day. The increase is driven by stronger usage across the Midcon and NE regions. Colder conditions on the horizon are expected to boost heating demand back up over the next 2 weeks to an average of 42.8 BCF/day.
Record warmth will dominate the southern US before another cold snap emerges across the Midwest, NE and Northern US next week. Below normal temps will become widespread with the North Central US seeing the coldest conditions relative to normal.
Production has turned negative with levels reaching 105.6 BCF/day this past weekend. The increase has been largely driven by improving levels in the Appalachian Basin as well as in Texas. Dry output was projected yesterday at 105.1 BCF/day but has come off slightly this morning, to an estimated104.3 BCF/day. Producers still intending to keep overall growth limited this year unless there is a significant upward move in prices.
The spot month has given back about half of yesterday's gains, trading 13 cents lower this morning, in response to tariff delays and varying opinions on how cold February is likely to be. LNG feedgas demand has also come off 0.7 BCF/day this morning to 14.2 BCF.
Technical Analysis
The March 25 natural gas contract gapped higher to begin Monday’s trade reaching a 3.407 high before settling the day at 3.352, up .308 (10.1%).
Monday’s volume was a high for 2025 registering 273,510 contracts.
The March contract has reversed course back lower in today’s early trade erasing roughly half of yesterday’s gains.
The gap created during expiration of the February 25 contract last week was closed on Monday with trade up to the 3.310 level.
Last week’s 2.990 low coincides with the 50% retracement of the 2024-2025 uptrend at 3.000.
If 2.990-3.000 support is broken, the 61.8% retracement at 2.660 which coincides with the 200 day moving average at 2.690 will become the next area of support.
Monday’s 3.407 high is primary resistance followed by the 10 average currently at 3.530.
10 and 40 day moving average alignment is now bearish turning the trend down into the February/March timeframe during which a post-winter seasonal low is typically set.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -42.25
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