Saad Ullah
After weeks of quiet trading, natural gas futures (NGX25) suddenly jumped on Monday, climbing 12.47% to $3.383 per MMBtu on the NYMEX. It was the strongest daily move since early May, suggesting traders are repositioning ahead of heating season.
Chart Shows Eerie Similarity to May's Rally
The rally, first flagged by Barchart, surprised many after the commodity had been drifting lower since late September. Now the big question is whether this is just a temporary squeeze or the beginning of something bigger.
The daily chart reveals a striking pattern. Monday's price action looks almost identical to what happened in May—both marked by sharp reversals after extended slides. In both cases, natural gas bottomed near $2.80–$2.90 before buyers stepped in hard, confirming this zone as a key support level.
Monday's session opened around $3.00, then quickly punched through $3.20 resistance to close at $3.38—the highest in two weeks. The size of the candle and the clean break above recent consolidation suggest real momentum, likely forcing shorts to cover. The next hurdles sit at $3.60 and $3.80. A push above $3.80 could open the door to $4.00.
What's Behind the Move
Three things came together:
- Colder forecasts – Weather models are calling for below-normal temperatures across major U.S. regions heading into late October and November, raising heating demand expectations.
- Supply concerns – Despite storage sitting slightly above the five-year average, U.S. drilling has slowed while LNG exports stay strong, tightening the supply outlook for winter.
- Short squeeze – After weeks of bearish positioning, the explosive move higher suggests traders were caught offsides and had to cover, amplifying the rally.
Monday's surge could mark a turning point, but traders need to see prices hold above $3.30 to confirm the move has legs. If that happens, the technical setup points toward $3.80–$4.00. But if natural gas slips back below $3.20, it could fall into the old $2.90–$3.10 range, meaning this was just a short-term pop rather than a real reversal.
Saad Ullah
