Natural Gas News: High Supply and Mixed Weather Push Futures Into Bearish Zone

Futures Decline Amid Supply Surplus and Weather Trends

Natural gas futures extended losses for a third consecutive session on Wednesday, slipping below key technical levels. The market now faces pressure from robust supply levels and moderated weather demand, reinforcing a bearish outlook for traders.

At 14:08 GMT, Natural Gas futures are trading $3.018, down $0.024 or -0.79%.

Key Technical Levels Signal Weakness

The market crossed below the 50-day moving average of $3.133 on Tuesday, establishing this level as new resistance. With a short-term range of $2.588 to $3.647, prices are currently testing the lower retracement zone at $3.118 to $2.993. A sustained move below $2.993 could trigger accelerated selling toward support levels at $2.762 and $2.588. Conversely, a break above $3.118 and the 50-day moving average could restore bullish momentum.

Supply Remains Strong Despite Injection Shortfall

U.S. natural gas inventories for winter 2024–25 began at 3,922 Bcf, the highest level since 2016 and 6% above the five-year average. Although net injections during the injection season were 21% lower than average, starting inventories were already robust, reducing the need for aggressive injections. The South Central region saw unique seasonal patterns, with withdrawals during summer to meet cooling demand.

Weather Patterns Add Pressure

Current weather models show frosty conditions in the Midwest and East, supporting high demand through Friday. However, the warming trend projected for the following week has dampened enthusiasm for sustained demand growth. The mild conditions across the West, central, and southern U.S., combined with moderated weather demand in the extended 8-15 day forecast, have added to the downward price pressure.

Market Forecast

Given the combination of strong supply, moderated demand, and critical technical breakdowns, the outlook for natural gas futures remains bearish. Traders should monitor support levels at $2.993 and $2.762, with a potential for further downside if these levels are breached. Short-term recovery would require a move above $3.134 to regain upward momentum.