Natural Gas News: Analysis Points to Trend Change Above 50-Day Moving Avg

Natural Gas Futures Hover as Resistance Levels Hold

U.S. natural gas futures ended Friday slightly higher, but gains stalled at resistance near $3.238–$3.261. Market direction now hinges on whether prices can break above this zone or if short-sellers maintain control. The technical picture and fundamentals remain in a tug-of-war, with oversupply and warm weather forecasts weighing against supportive demand signals from power generation.

Can Futures Break Through $3.261 Resistance

Friday’s trade confirmed $3.238 and $3.261 as key resistance levels. A close above $3.261 could trigger momentum toward the 50-day moving average at $3.325, which traders are treating as the short-term trend gauge. A move through the average would open the door to challenge $3.459 and the resistance cluster between $3.489 and $3.529. Failure to clear $3.261 leaves the market exposed to a retest of support at $3.063, followed by the cluster at $2.986–$2.938.

Do Ample Inventories Keep Bulls on Hold

Storage remains a major headwind. The EIA reported a +75 bcf build for the week ending September 19, nearly in line with consensus and keeping stocks 6.1% above the five-year average. U.S. inventories are up +0.5% y/y, while Europe’s gas storage sits at 82% full, trailing its seasonal norm of 89%. These figures underscore that supply cushions remain strong heading into early October.

Will Weather and Production Pressure Prices

Forecasts continue to point to warmer-than-normal U.S. temperatures through October 10, limiting early heating demand. On the supply side, production is near record highs. Lower-48 output stood at 107.7 bcf/day on Friday, up +6.8% y/y. The EIA recently lifted its 2025 production forecast to 106.63 bcf/day, while Baker Hughes reported 117 active rigs, just off the two-year high reached in August. These data points reinforce bearish pressure from ample output.

Could Power Demand Offer Support

One supportive element has come from electricity demand. The Edison Electric Institute noted that U.S. power generation rose +2.3% y/y in the week ending September 20 and is up +2.85% y/y over the past 52 weeks. Gas-fed power burn remains a key demand driver, particularly as LNG exports continue steady near 15.8 bcf/day.

Market Forecast

Natural gas futures remain in a consolidation phase, with $3.261 acting as the near-term pivot. A breakout above this level could trigger short-covering and drive a test of $3.325 and higher. However, strong storage, record production, and mild weather forecasts keep downside risks intact. Unless prices break through resistance with conviction, the market leans bearish, with traders eyeing $3.063 and $2.986 as next support zones.

More Information in our Economic Calendar.