Natural Gas February Trends 2025

 Natural Gas February Trends

Looking at broader trends, the U.S. Energy Information Administration (EIA) data up to early February 2025 (from their latest updates) showed inventories at 2,297 billion cubic feet (Bcf) as of February 7, down 100 Bcf from the prior week—below last year’s levels and the five-year average. This drawdown aligns with the cold snap.  Prices at the Henry Hub, a key benchmark, were around $3.22/MMBtu on February 5 (per EIA’s weekly update), some suggest they’ve since climbed past $4.2 by February 19, reflecting a rapid response to weather and export dynamics.

 

Weather’s a big driver here. February 2025 has apparently brought colder-than-expected conditions across parts of the U.S., increasing heating demand and straining production (frozen wells don’t help). Meanwhile, LNG exports are hitting records, likely due to new facilities like Plaquemines and Corpus Christi Stage 3 ramping up, as noted in late 2024 forecasts. This combo—high domestic use plus export pressure—seems to be pushing prices up and inventories down faster than usual for late February.

 

February 18 warned of a potential warming trend late in the month, which could ease demand and lead to price dips if supply stabilizes. Volatility’s clearly in play, as they noted a smaller-than-expected inventory draw of 116 Bcf (possibly from an earlier EIA report this month), hinting supply might not be as tight as the price surge suggests.

So, natural gas in February 2025 is showing a lively mix: bullish price spikes driven by cold weather and LNG exports, tempered by whispers of a possible late-month cooldown.

Natural Gas Failing The 1x1 = 45Deg Gann Fan

Looking at the price action of natural gas, we saw it break through the 1x1 45-degree angle on January 13, 2025. Initially, it held above it for a short time, but ultimately, it couldn't sustain the momentum and failed. I explain this theory in more detail in a video on my YouTube channel, WD Gann Price and Time.

There’s a scene in The Matrix where Neo jumps off a building for the first time, convinced he’ll make it. But the reality is, most of the time, when you take that leap for the first time, you fail. This is similar to natural gas—after touching the 1x1 angle for the first time in a while, it also failed to maintain its position.

 

The WD Gann Technique: A Look at the Gann Fan

The Gann Fan is one of the key tools used in the trading methods developed by William Delbert Gann, a legendary financial analyst and trader in the early 20th century. Gann’s techniques, which combine geometry, astrology, and numerology, have become the subject of fascination among traders and market analysts. The Gann Fan, in particular, is a unique and powerful tool that traders use to predict price movements and identify potential support and resistance levels.

In this article, we will explore what the Gann Fan is, how it works, and how traders can use it in their trading strategies.

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What is the Gann Fan?

The Gann Fan is a technical analysis tool that consists of a series of diagonal lines, or “fan lines,” drawn from a significant price point on a chart. These lines are drawn at specific angles, based on Gann’s theories of geometry and time cycles, and are used to predict future price movements.

The fan lines are drawn at specific angles to represent different time and price relationships. According to Gann’s methods, the angles at which these lines are drawn have special significance and are believed to provide insights into potential support and resistance levels, as well as the future direction of the market.

The main angles used in the Gann Fan include:

• 1x1 Angle (45 degrees): This is the most important angle, representing a perfect balance between time and price. It’s often referred to as the “primary” angle in Gann’s methodology. A price moving along this line indicates that the market is balanced in terms of time and price.

• 1x2 Angle (26.25 degrees): This angle indicates that price is moving at half the rate of time. A price moving along this line suggests a slower price movement relative to the time passed.

• 2x1 Angle (63.75 degrees): This angle represents a faster price movement relative to time. A price moving along this line indicates a more aggressive or strong market trend.

• Other angles: Gann also used other ratios, including 1x3, 3x1, 1x4, 4x1, and so on. Each of these angles can help traders identify different price and time relationships.

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How the Gann Fan is Drawn

To draw a Gann Fan on a chart, traders typically follow these steps:

1. Identify a Significant Price Point: The first step is to select a key high or low point on the chart that is significant for the asset or market being analyzed. This point is often chosen based on historical price movements, such as major peaks or troughs.

2. Draw the First Fan Line (1x1): Starting from the identified point, a diagonal line is drawn at a 45-degree angle. This is the 1x1 line, and it represents the balance between time and price.

3. Draw Additional Fan Lines: Other lines are drawn at the predetermined angles (1x2, 2x1, 1x3, etc.). These lines are drawn either above or below the 1x1 line, depending on whether the market is trending upward or downward.

4. Observe Price Interaction: Once the fan lines are drawn, traders observe how the price interacts with them. If the price is moving toward a fan line, it may act as a support or resistance level. The Gann Fan can provide clues as to where future price movements may occur, helping traders make more informed decisions.

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How to Use the Gann Fan in Trading

The Gann Fan is a versatile tool that can be used in different market conditions. Here’s how traders typically use the Gann Fan:

1. Support and Resistance Levels: The fan lines act as potential support and resistance levels. If the price is approaching an upward-sloping fan line, it could encounter resistance. Conversely, if the price is approaching a downward-sloping fan line, it might find support. By observing these interactions, traders can set entry and exit points for trades.

2. Trend Identification: The Gann Fan can help traders identify the strength of a trend. If the price is moving consistently along a particular fan line (especially the 1x1 angle), it suggests a balanced market with a steady trend. If the price breaks through a fan line, it could indicate a trend reversal or a significant change in market dynamics.

3. Time and Price Projections: Gann’s technique is based on the relationship between time and price. By using the Gann Fan, traders can estimate future price movements based on the angles of the fan lines. For example, if a price reaches a 1x1 line, it could signify that the price has moved a certain distance over a specific period, and the trader can project future price action accordingly.

4. Confluence with Other Indicators: The Gann Fan is often used in conjunction with other technical analysis tools such as Fibonacci retracement levels, moving averages, or oscillators. When the Gann Fan lines align with other indicators, it can provide stronger signals of potential price reversals or trend continuation.

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Limitations of the Gann Fan

Despite its usefulness, the Gann Fan is not without its limitations. Here are a few points to consider when using the tool:

1. Subjectivity: Drawing the fan lines is somewhat subjective. Different traders may draw the lines in slightly different locations, which can lead to varying interpretations of the same chart.

2. Complexity: The Gann Fan requires a deep understanding of Gann’s theories and the various angles involved. For novice traders, it can be a complex tool to master, and it may take time and experience to use it effectively.

3. Market Conditions: Like any other technical analysis tool, the Gann Fan works best in trending markets. In choppy or sideways markets, the fan lines may not be as effective in predicting future price movements.

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Conclusion

The Gann Fan remains one of the most iconic and intriguing tools in the world of technical analysis. Though it may appear complex at first glance, it provides valuable insights into price movements, trend strength, and potential support and resistance levels. By understanding how to use the Gann Fan effectively, traders can gain a unique perspective on market dynamics and make more informed trading decisions.

However, like any other trading technique, the Gann Fan should not be relied upon in isolation. It’s best used in conjunction with other tools and indicators, as part of a broader trading strategy. With practice and a solid understanding of Gann’s theories, traders can harness the power of the Gann Fan to enhance their trading success.

Oil in Focus: Analyzing the Forces Behind Crude Prices

Crude oil prices are increasing today due to several factors:

Oil in Focus: Analyzing the Forces Behind Crude Prices

                                         Video analysis: https://youtu.be/IIBhE75D1Yc

1. Geopolitical Tensions: 

Recent geopolitical events, particularly in regions like the Middle East and involving major oil-producing countries, have introduced a risk premium into oil prices. Posts on X suggest that there might be an increase in geopolitical risk due to recent terror attacks in the U.S., which could influence oil prices.


2. Optimism Over China's Economic Growth:

There's an uptick in oil prices driven by optimism regarding China's economic recovery, which is expected to boost fuel demand. Positive manufacturing PMI data from China, despite being below expectations, still signals some level of economic recovery, influencing oil demand outlooks positively.

 

3. Market Sentiment and Technical Momentum:

Oil prices have been rising due to technical momentum in the market, although fundamentals like ample supply, rising non-OPEC+ output, and high spare capacity might cap significant gains. This was highlighted by market analysts on X, noting that despite weak fundamentals, market sentiment can push prices higher in the short term.


4. Decrease in U.S. Crude Inventories:

A decline in U.S. crude oil inventories for several consecutive weeks has contributed to the increase in oil prices. This was mentioned in posts on X, indicating that inventory levels play a crucial role in daily price movements.


 

These factors collectively contribute to the current rise in crude oil prices. However, it's worth noting that the oil market is complex, and prices can be influenced by a myriad of other factors not mentioned here, including global economic conditions, production decisions by OPEC+, and changes in energy policies around the world.