Natural Gas News: Futures Rally, But Warm Weather May Cap Market Momentum

Prices Edge Higher, but Can Gains Hold?

Natural gas futures are trading higher to start the week as traders react to weekend forecast adjustments. The market remains rangebound, with resistance at $4.322 and support at $3.924.

A sustained break above $4.322 could trigger an acceleration toward $4.713–$4.901, while failure to hold $3.924 may extend selling pressure toward the 50-day moving average at $3.696. This indicator has guided the market higher since December, making it a key level to watch.

At 12:01 GMT, Natural Gas Futures are trading $4.204, up $0.100 or +2.44%.

How Did Last Week’s Fundamentals Influence Market Sentiment?

Despite early-week gains, fundamental factors remain a concern. Last week, mild temperatures suppressed heating demand, keeping a lid on prices. Most of the U.S. saw unseasonably warm conditions, with highs ranging from the upper 50s to 80s. While a brief cooldown is expected this week, forecasts suggest above-normal temperatures will persist through late March, further dampening demand.

Weak consumption has reinforced the seasonal transition into the storage build period, limiting any sustained bullish momentum. Without a significant weather shift, demand remains a headwind for natural gas prices.

Can Storage and Production Trends Provide Support?

Even with weak demand, storage remains tight compared to historical averages. The latest EIA report showed a larger-than-expected withdrawal of 62 Bcf for the week ending March 7, pushing inventories 11.9% below the five-year average. While this helped stabilize prices briefly, it has not been enough to drive a lasting uptrend.

On the supply side, Lower-48 dry gas production remains steady, averaging 107.1 Bcf/day, a 4.6% year-over-year increase. Total demand reached 77.0 Bcf/day, up 5.7% from last year. Meanwhile, LNG export flows slipped slightly to 15.2 Bcf/day due to maintenance-related disruptions.

Market Forecast: Will Upside Momentum Hold?

While early-week price action suggests some bullish interest, fundamentals remain bearish. Persistent warmth continues to cap demand, and without stronger LNG flows or a supply disruption, any rallies may be short-lived.

Traders should watch for changes in weather models, as colder forecasts could offer support. For now, natural gas prices are likely to remain choppy, with downside risks still present.

More Information in our Economic Calendar.