Record Rally in Natural Gas

• NG at $4.8 – 5-week high
• Key driver: NOAA's extreme cold weather alerts
• Technicals: price above MAs, but RSI near overbought

The natural gas (NG) market is experiencing an explosive rally, surging over 50% since last Friday to reach $4.8/MMBtu – its highest level in five weeks. The cause is an extreme weather forecast: NOAA has issued warnings for severe cold and winter storms across the US through late January, which is set to sharply boost heating demand.

Paradoxically, this surge is occurring against a backdrop of record-high production. Yet, market participants are disregarding this fundamental oversupply, placing their bets squarely on the weather factor.

The technical picture is strong but overheated. The price (~$4.800) is firmly holding above all key moving averages (SMA21 at $3.868, SMA100 at $3.653), and the MACD is issuing a buy signal. However, the RSI(14) at 66.1 is approaching overbought territory, increasing the risks of a correction or consolidation.

Despite the powerful uptrend, the market is entering a phase of heightened volatility. Further price action is likely to hinge on the unfolding weather scenarios.