Natural Gas News: Tight Supply and Mild Weather Keep Futures in Tug-of-War

U.S. Natural Gas Futures Hold Firm as Traders Weigh Weather and Supply Concerns

U.S. natural gas futures edged higher on Tuesday, hovering around the pivotal $4.020 mark as traders balanced milder weather forecasts with supply constraints. The market’s current positioning suggests a tug-of-war between near-term bearish sentiment from warmer temperatures and bullish undertones due to storage challenges.

At 16:32, natural gas futures are trading $4.034, up $0.040 or +1.00%.

Can Buyers Push Prices Above Key Resistance?

A sustained move above $4.020 would signal stronger buying interest, potentially propelling prices to fill Monday’s gap between $4.090 and $4.148. Should this bullish momentum persist, traders might see a test of last week’s high at $4.476, setting up a critical resistance level for the market.

On the flip side, if sellers regain control, the next buying opportunities could emerge at the pivot of $3.733 or the 50-day moving average at $3.370. These support levels may attract fresh buyers, considering the broader uptrend.

Storage Concerns Provide Underlying Market Support

March Nymex natural gas futures gained early Tuesday, with April futures also rising by 4.7 cents to $4.029. Market participants remain wary of the tightening market balance, particularly with potential supply challenges ahead of the next peak demand season.

Andy Huenefeld, managing partner at Pinebrook Energy Advisors, noted that while the worst of winter may be over, “the fundamental backdrop is still supportive,” which could maintain a floor under forward pricing and sustain some upside potential.

Short Sellers and Opportunistic Buyers Drive Volatility

After Monday’s pullback triggered by warmer weather forecasts, U.S. natural gas futures have steadied. According to Gary Cunningham of Tradition Energy, the market saw “opportunistic buying overnight and profit-taking by short sellers,” contributing to Tuesday’s modest gains.

While March weather predictions remain a bearish factor, Cunningham believes that fundamental support will likely keep prices above the $4 level through the remainder of 2025.

Market Forecast: Cautiously Bullish

The current market setup leans cautiously bullish. With support around $3.733 and $3.370 expected to hold, there’s potential for an upside push if weather models shift colder or if supply concerns intensify. Traders should watch for a breakout above $4.148, which could open the door to higher targets, including last week’s high of $4.476.

However, with winter demand waning, gains may be capped unless a new catalyst emerges. Staying nimble and monitoring key technical levels will be critical for traders navigating this mixed market environment.

More Information in our Economic Calendar.