Natural Gas News: Futures Dip as $2.315 Resistance Holds, Eyeing EIA Report

Natural Gas Futures Waver Amid Mixed Signals

U.S. natural gas futures are trending lower on Wednesday, following a failed attempt to breach the $2.315 resistance level. This comes after a strong rally on Monday that saw renewed buying interest near the $2.091 support.

At 13:29 GMT, Natural Gas Futures are trading $2.198, unchanged.

Weather Patterns and Demand

Weather forecasts continue to play a crucial role in market movements. NatGasWeather predicts moderate national demand through Friday, with expectations of stronger demand over the weekend due to hotter-than-normal conditions across much of the U.S. However, milder temperatures in the North and East are likely to temper overall demand.

Production Cutbacks

The natural gas market is grappling with persistent oversupply issues, leading major producers like EQT and Coterra Energy to scale back production. These companies are delaying new drilling projects and well connections to pipelines in response to unusually low prices during peak summer demand.

Supply and Export Trends

Natural gas production in the lower 48 states has declined from its July peak of over 103 bcf/d to approximately 101 bcf/d. UBS analysts attribute the recent price decay to storage congestion risks, exacerbated by July’s production surge. LNG exports temporarily decreased due to Hurricane Beryl but have since recovered.

Future Outlook

UBS analysts maintain a cautiously optimistic outlook for natural gas prices in 2025, assuming normal winter conditions. The expected increase in LNG export capacity from terminals like Plaquemines and Corpus Christi is anticipated to support stronger demand and potentially tighter market balances in the coming years.

Market Forecast

The short-term outlook for natural gas futures remains bearish, with prices struggling to break above key resistance levels. However, the market may experience increased volatility as traders weigh the impact of late-summer heat against the approaching fall season. The upcoming EIA storage report on Thursday could provide further direction for prices. In the medium term, expanding export capacity and production adjustments may support a gradual price recovery, but this remains contingent on winter weather patterns and global demand factors.

Technical Analysis

Natural gas futures are flat on Wednesday, but what does it mean? Are prices consolidating for the next rally or the next break?  Time is running out for the bulls with the U.S. summer nearly over. At this time, it looks as if there will be more than enough natural gas in storage at the start of the winter heating season.

Support is the old top at $2.149 and a short-term pivot at $2.091. This level was tested successfully earlier in the week.

From a bullish standpoint, the market has to overcome $2.315 to change the trend to up on the main swing chart. Crossing to the strong side of the 50-day moving average at $2.395 will be the next bullish move.