Natural Gas News: $3.39–$3.73 Trap Signals Market Indecision as Traders Await Demand Catalyst

U.S. Natural Gas Futures Steady as Bulls and Bears Eye Key Technical Levels

U.S. natural gas futures are firming in early Wednesday trading, rebounding slightly after a two-session decline, but the market remains confined to a tight technical range. With the June Nymex contract oscillating between pivotal levels of $3.391 and $3.733, traders are awaiting a decisive move as competing weather and supply signals keep direction unclear.

At 13:51 GMT, Natural Gas Futures are trading $3.590, up $0.127 or +3.67%.

Is Mild Weather Still Weighing on Demand?

Weather continues to suppress near-term demand. NatGasWeather reports that a mix of systems moving across the U.S. from May 5–11 will keep most regions comfortably mild, with highs largely in the 60s to 80s. Demand for natural gas remains “light to very light” this week as heating and cooling needs are subdued. This weather-driven lull follows Tuesday’s 2.45% drop in June gas futures, pressured by a muted consumption outlook and ample renewable generation in the southern U.S.

How Are Production and Exports Balancing the Equation?

Dry gas production in the Lower 48 stood at 105.0 Bcf/day on Tuesday, up 4.3% year-over-year, while demand was 64.4 Bcf/day, down 4.6%. LNG export flows dipped 11.7% week-over-week to 13.8 Bcf/day, further loosening the balance. However, U.S. electricity output, a key end-use sector for natural gas, rose 5.2% year-over-year during the week ending April 26, which could lend modest support if the trend holds.

Are Storage Levels Reassuring or Concerning?

Storage remains a focal point for traders. Last week’s EIA report showed a +107 Bcf injection—slightly under consensus but nearly double the 5-year seasonal average of +58 Bcf. Current inventories are 0.2% above the 5-year norm and down 17.8% year-over-year. Despite last month’s price dip on mild weather, BloombergNEF projects storage could still end summer 10% below the 5-year average. European storage stands at 39%, well below its own seasonal norm, but that has had limited spillover impact on U.S. markets so far.

What Could Break the Current Range?

Technically, natural gas is boxed in. A break below $3.391 could open the door to a retreat toward the 200-day moving average at $3.117. Conversely, a close above the $3.733–$3.747 zone would position the market to challenge the 50-day moving average at $3.90. With the Baker Hughes rig count inching up to 101 but still near multiyear lows, production is unlikely to surge in the short term, keeping supply risk alive if demand surprises.

Market Forecast: Neutral with Slight Bearish Tilt

Until a decisive weather pattern emerges or technical levels are breached, natural gas is likely to stay rangebound. Given mild temperatures, robust storage, and soft demand, near-term pressure could tilt bearish unless a heatwave or export surge shifts the balance.

More Information in our Economic Calendar.