Natural Gas futures experienced a turbulent week, closing with a steep 5.23% weekly loss despite a modest recovery during Friday’s session. The market is currently grappling with the classic transition into the “shoulder season,” where erratic weather forecasts create heightened volatility, forcing investors to weigh lingering winter blasts against the inevitable arrival of spring softness.

Shoulder Season Pressures Mount

The primary driver behind this week’s sell-off appears to be the shifting fundamental landscape. As we move deeper into February, the window for sustained, high-demand cold snaps narrows. The 5% drop over the last five days reflects the market pricing out the “fear premium” of winter shortages. Traders are increasingly focused on storage withdrawals, which, while still active, are expected to slow down as temperatures in key consumption regions (like the US Northeast and Midwest) begin to moderate. This seasonal weakness is a standard cyclical pattern, but the speed of the decline—from highs near $3.30 down to $3.11—caught many bulls off guard.

Technical Resilience at $3.11

From a technical standpoint, the price action offers a glimmer of hope for bullish investors. The chart reveals a critical defense of the **$3.1140** intraday low. The inability of bears to push prices below this psychological $3.10 threshold triggered a technical rebound, helping the asset close at 3.2430 on Friday. This suggests that while the broader trend is downward, there is significant buying interest at these lower levels. Investors should view the **$3.11-$3.12** zone as a “line in the sand”; a breach below this could open the door to a retest of the $3.00 handle, while holding it could facilitate a consolidation phase.

Global Context and Market Sentiment

While this data reflects US Henry Hub futures, the sentiment ripples across the global energy complex, including the Israeli market. A cooling global gas market often dampens sentiment for energy-heavy indices. For Israeli investors watching names like NewMed Energy or Ratio Energies, US gas volatility serves as a proxy for global risk appetite in the sector. Although local contracts are often long-term and indexed differently (e.g., to Brent), the psychological link remains: weakness in global benchmarks can limit upside momentum for local exploration and production (E&P) stocks.

Outlook:
Looking ahead to next week, volatility is expected to remain high. Investors should closely monitor weather model updates for late February; any hint of a “polar vortex” could spark a sharp short-covering rally back toward $3.30. However, without a significant weather catalyst, the path of least resistance remains lower as the market naturally drifts toward the low-demand spring months. The key level to watch is $3.11—holding this support is essential for preventing a deeper correction.