5.5% Drop for U.S. Natural Gas Futures on Weather Forecasts
Natural gas futures fell further on Tuesday as warm weather forecasts remain in place and erase months of gains.
Quick overview
- Natural gas futures fell 5.56% to $3.02/MMBtu as warm weather forecasts diminish demand.
- The current price is below key moving averages, raising concerns about a potential drop below $3.
- Investor sentiment has declined significantly since January highs, with weakened demand and leveling supplies contributing to market losses.
- Rising natural gas production may lead to an oversupply issue similar to that experienced in 2025.
On Tuesday, natural gas futures fell 5.56% to hit $3.02/MMBtu and erased gains from late 2025 as cold winter weather draws to a close and warm temperatures are expected.
With many of the fall 2025 gains wiped out, natural gas futures for the United States are lower than they have been in months. The warm weather forecasts are the obvious culprit, and the market is expecting warmer weather to push prices even lower as demand diminishes.
The issue of supply and demand is likely to become an important one for the market in the coming months as demand falls while fresh injections are made into reserves that are close to normal levels for this time of year.
Prices Dip under Moving Averages
The price of natural gas is in a confirmed downtrend, and the current price of $3.02 is well below the 50-day moving average of $3.61 as well as the 200-day moving average of $3.70. The current support level is low, and investors fear a drop below $3 and what that will mean for the price of gas moving forward.
Investor sentiment has plummeted since the January highs near $7.50 per one million British Thermal Units, and continuous warm weather forecasts are keeping the gas futures from making back lost ground. Now, weakened demand and leveling supplies are plunging the market further into losses.
Aggressive buying trends fell quickly in late January and early February across the United States, but cold weather is still keeping demand high with several U.S. trade partners. The export side of the U.S. gas futures markets remains strong, helping to keep the price from dropping below $3 for now.
Rising production of natural gas, however, will offset gains from exports. In a number of areas across the United States and around the world, natural gas production is ramping up, and analysts expect the market to see an oversupply problem this year similar to what occurred in 2025.
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