Natural Gas Update February 2,2026

Overview

Natural Gas--NG is down 81.2 cents at $3.542
NG spot futures have gapped lower over the weekend as the back end of the weather forecasts gave up a lot of heating demand.

Over the weekend, the near-term temperature outlook moderated, especially for the Feb 11-15 period, which now look to experience below-average Gas-Weighted Degree Days (GWDDs), as per Celsius Energy analysis. Over the weekend, the American model was seen having lost 23 HDD's , while the European model lost 30 HDD's. The current forecast shows high demand for natural gas for days 1 thru 6, moderate demand for days 7 and 8 and then low demand for days 9 thru 15. (NatGasWeather) NOAA forecasts February to be warmer than normal for most of the country.

Money managers covered a lot of their net short positioning in NG futures/options on the CME in the week ended last Tuesday Jan. 27. Money managers covered 55,044 contracts of their net shorts, dropping their net short total to 21,970 contracts. 73,706 contracts of short positions in futures/options were covered.

TTF European gas futures have dropped by over 13% today, mirroring the broad selloff in the other energies. The spot March TTF futures have gapped lower today. The gap goes from Euro  37.000 to 37.350. The spot TTF futures were printing Euro 34.460 at 8:45 AM (EST). European gas futures have sold off also as a result of weather forecasts having turned milder in Europe as well as in the US, easing supply concerns. But, European gas storage dropped to 44% of total capacity on January 26, according to European energy data platform AGSI. That is the lowest level for this time of the year since 2022, when it hit 40% as the market scrambled to replace Russian supplies, and it is well below the 10-year average of 58%. And if current trends persist, storage could plunge to 30% or lower by the end of March, based on Reuters analysis of historic data. If Europe ends winter with storage only 30% full, about 60 billion cubic metres  (=2.119 TCF) of gas will need to be injected to return stocks to 83% - the level at which the region entered last winter.

The recovery in China’s imports of LNG is expected to extend for another month in January, Kpler has reported, for a total of three consecutive months of higher LNG imports year-on-year. The analytics provider estimates that China will import 6.94 million tons of LNG (= 338 BCF) this month, as quoted by Bloomberg, which added the amount would represent a respectable 15% increase on January 2025. According to the report, the import increase may suggest more cargoes getting delivered to China under long-term contracts. Earlier in 2025,  LNG imports into China saw year on year declines, as China raised its domestic production and shied away from imports due to President Trump's tariffs. Between November 2024 and October 2025, China recorded 12 straight months of LNG import declines. (Oil Price)

The Baker Hughes gas rig count issued Friday showed an increase of 3 units.

In the LN/NG put options Friday, very large positions were initiated as per CME open interest data. 7,500 contracts of the April $3.50 puts were bought against selling of 10.000 contracts of the April $3.00 puts ( thus in a 1 by 1.5 lot ratio) at a cost of 12.5 cents. In the May put options, 7,500 contracts of the $2.75/$2.50 put spread traded 2.9 cents. In the October options, the $3.25/$2.50 put spread traded 13.1 and 13.3 cents; in total 5,000 contracts traded.

Also seen on the CME block board was a trade of 18,000 contracts of the May October spread trading minus 40.3 cents; the May October spread settled Friday at minus 37.6 cents and today is printing 10.9 cents lower at minus 48.5 cents.

The $3.736 high for the NG futures session today was seen on the opening last night. The gap from the weekend goes up to 3.818. Momentum has turned negative in the sharp selloff. Support at 3.543-3.550 has been pierced today with a current low of 3.537. Next support is then at 3.510-3.515 and then at 3.434-3.437. Resistance comes in at 3.761-3.768. 

Enjoyed this article?

Subscribe to never miss an issue. Daily updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.

Click below to view our other newsletters on our website:

Daily Energy Market Update

Ethanol Report

Fuel and Freight Daily Report

Disclaimer

This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC