U.S. natural gas futures came under renewed pressure on Friday, sliding more than 2% as traders reassessed near-term demand prospects and reacted to increasingly bearish technical signals. The pullback follows a strong multi-month recovery and reflects growing sensitivity to weather forecasts, positioning, and profit-taking after an extended rally.

Front-month natural gas futures fell to around $4.01 per MMBtu, down 2.43% on the session, while the actively traded contract hovered near $4.03, extending losses seen earlier in the week. The move pushed prices toward the lower end of their recent trading range, even as longer-term performance metrics remain positive.

Short-Term Selling Pressure Builds

The immediate catalyst for the decline appears to be a shift in short-term sentiment. Technical indicators across 30-minute, hourly, 5-hour, and daily timeframes are all flashing Strong Sell, highlighting persistent downside momentum. Moving averages have also turned decisively bearish in the near term, suggesting limited support for a quick rebound.

Natural gas is now down 2.14% on the day, 18.04% over the past week, and 11.83% over the past month, underscoring the speed of the recent correction. Traders note that the market has struggled to hold above the $4.20 level, which previously acted as resistance-turned-support during the late-November rally.

Longer-Term Trend Remains Constructive

Despite near-term weakness, the broader trend remains constructive. Natural gas prices are still up 22.00% over three months, 12.43% over six months, and 22.74% year-on-year, reflecting a structural recovery from last year’s lows driven by tightening supply dynamics, stronger LNG export demand, and production discipline.

Weekly and monthly technical indicators continue to signal Strong Buy, highlighting a disconnect between short-term momentum and the longer-term trend. Analysts say this divergence often emerges during consolidation phases, particularly after sharp rallies, and does not necessarily imply a breakdown in the broader bullish structure.

Fundamentals in Focus as Volatility Persists

Fundamentally, the market remains highly sensitive to weather-driven demand expectations. Any moderation in cold-weather forecasts can quickly dampen consumption outlooks, while storage levels and production data continue to influence positioning. The recent selloff suggests traders are increasingly cautious about chasing prices higher without clear confirmation of sustained winter demand.

At the same time, U.S. natural gas production remains elevated, providing a counterbalance to demand-driven price spikes. This dynamic has kept volatility elevated, with sharp moves occurring in both directions as new data emerges.

What to Watch Next

Looking ahead, market participants will closely monitor updated weather models, weekly storage reports, and LNG export flows for direction. A sustained move below the $4.00 threshold could trigger additional technical selling, while stabilization above that level may reinforce the longer-term bullish narrative.

For now, natural gas appears caught between short-term corrective forces and longer-term structural support, setting the stage for continued volatility into year-end.