U.S. natural gas futures are shedding over 6% at the end of the week, breaching the $4/MMBTU threshold, as milder temperatures curtail heating demand. The decline comes as forecasts point to a moderation in the recent cold snap across key heating regions.
Demand has softened, aligning with the 5-year average over the past two days. While near-term forecasts still indicate below-average temperatures, they fall short of the extreme lows seen earlier this month. Expectations are for a return to or above seasonal norms by late January.
The upcoming contract rollover is also exerting downward pressure, with an estimated 60-cent impact due to the current short-term backwardation in the futures curve.
At current levels, NATGAS faces the risk of not only breaking below the key 15-day moving average support but potentially testing the 60-day moving average.
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📊Daily Summary - Hawkish Fed raises rates and signals more. Dollar gains while gold falls
Hawkish move from the Fed! Warsh takes no prisoners in the fight against inflation. US500 at its lowest since August 3, and gold already below $4,300.