Natural Gas, historically highly correlated with WTI Oil, has largely decoupled over the past four sessions.
While the weekly correlation ranged between 0.20 and 1.00 since 2020, it has turned close to negative in late 2025.
Since the Sunday open, US Natural Gas prices have exploded by approximately 60%.
While initially attributed to fears of European supply disruptions amid recent EU-US trade tensions, the reality is more complex.
US output sits at decade lows.
Persistently low prices have disincentivized production following the record output of 2023-2024, creating a supply bottleneck just as the Northern Hemisphere enters its coldest period.
This winter differs significantly from recent years. Previous warm seasons created storage gluts and led to assumptions that milder winters were the new norm. However, the current reality is harsh (This current winter is a cold one, based in Montreal I can only confirm), challenging those assumptions.
Simultaneously, power generation demand is surging.
The need to power AI data centers and metal smelting operations—sectors currently seeing high demand—is outpacing futures delivery schedules, fueling this price acceleration.
Stress on the system is amplified by the US’s role as the world’s leading LNG exporter, particularly to Europe following the closure of Russian supply routes.
Consequently, demand spikes or supply troughs in Europe now have immediate impacts on US spot prices.
The market is facing a perfect storm: a severe winter, rising global energy demand, and escalating tensions between key suppliers and constrained consumers.
Add to this the instability in Iran—holder of the second-largest proven gas reserves—and persistent global conflicts, and the result is an explosive mix for prices.
We will now dive into the Natural Gas charts, ranging from daily to intraday timeframes, to identify the trajectory of this squeeze, potential retracement levels, and historical context.
