Natural Gas News: Neutral Market Mood Holds as Chart Levels and Weather Battle for Control

Natural Gas Futures Pressured by Weak Demand but Supported by Hotter Outlook

U.S. natural gas futures are showing signs of exhaustion after Monday’s sharp rally, slipping slightly on Wednesday as traders assess near-term weather and technical signals. While short-term resistance levels are forming below the 50-day moving average, expectations for above-normal mid-June temperatures are lending some support to July contracts.

At 13:12 GMT, Natural Gas futures are trading $3.699, down $0.023 or -0.62%.

Can Technical Resistance at the 50-Day MA Hold Off Further Gains?

Price action is being capped by minor tops at $3.764, $3.832, and $3.859, with the 50-day moving average at $3.900 acting as the key breakout level. On the downside, the 200-day moving average at $3.548 is offering major support. Although typically a break below this level would signal a trend reversal, current price behavior is showing limited follow-through selling. Traders appear hesitant to chase weakness given seasonally bullish potential from temperature-driven demand.

Will Forecasted Heat Drive a Demand Rebound for Power Burn?

Weather forecaster Atmospheric G2 is calling for above-normal temperatures across much of the central and eastern U.S. from June 8–12, with further heat possible through mid-month. This aligns with recent strength in July Nymex natural gas (NGN25), which gained another $0.028 (+0.76%) on Tuesday after Monday’s sharp rally. Hotter conditions increase power burn from utilities, as cooling demand rises — particularly across the southern U.S., where temperatures are already surging into the 90s and 100s.

Is Weak Demand and Supply Growth a Bearish Underpinning?

Despite the bullish weather outlook, underlying fundamentals remain soft. Lower-48 gas production rose to 103.9 bcf/day (+1.7% y/y), while gas demand slipped to 68.8 bcf/day (-2.7% y/y). LNG export flows also fell to 12.9 bcf/day, down 12.9% week-over-week. Additionally, electricity generation dropped 4.4% y/y for the week ending May 24, reducing utility gas demand. The latest EIA storage report also weighed on sentiment, showing a +101 bcf injection — above the 5-year average — and inventories standing +3.9% above seasonal norms.

Will Storage Surplus and Slowing Exports Weigh on Summer Prices?

European gas storage levels were reported at 49% full as of June 1, notably below the 60% five-year average, though still not alarming. Domestically, drilling activity remains subdued, with Baker Hughes reporting only 99 active rigs — slightly off the recent four-year low. While this limits forward supply growth, near-term fundamentals appear well-balanced, if not slightly loose.

Market Forecast: Neutral-to-Bullish Bias Holds for Now

With production steady and demand lagging, short-term gas prices face resistance. However, the potential for persistent June heat could tighten balances through higher cooling-related power burn. As long as prices hold above the 200-day moving average and weather forecasts stay hot, the bias favors a neutral-to-bullish stance in the short term, particularly if $3.900 resistance is breached.

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