Natural Gas News: Bearish Chart Pattern Targets $2.885 Key Support Level Today

Natural Gas Futures Break Key Support as Bearish Momentum Builds

Natural gas futures are under heavy technical pressure this week, with August contracts breaking below key support at $3.149 and sellers now eyeing the long-term bottom at $2.885.

Wednesday marked the third straight session of losses after a Sunday gap lower triggered a sharp wave of selling.

Momentum is firmly to the downside, reinforced by failure to reclaim the 50-day moving average at $3.700 and the 200-day at $3.795. These levels now stand as formidable resistance zones, with bulls sidelined until meaningful buying returns.

Are Cooler Forecasts Eroding Demand Expectations?

Weather outlooks turned cooler over the weekend and remain mild through early August. Forecast models from both GFS and EC trimmed five cooling degree days (CDDs), dialing back the intensity of heat expected across the eastern and central U.S.

Vaisala reported Tuesday that the Midwest will trend cooler from July 27–31, with widespread mild conditions forecast from August 1–5. Although parts of the South continue to bake in triple-digit heat, it’s not enough to offset the broader drop in national demand.

LNG Feed Gas Retreats from Recent Highs

LNG feed gas flows slipped to 14.9 Bcf/d on Tuesday, down 1.1% week-over-week, according to BNEF. This pullback follows weekend softness in export terminal activity and coincides with more subdued international demand.

European gas storage sits at 65%, below the five-year average of 73%, but still sufficient to reduce urgency for additional U.S. cargoes. Without stronger global signals, LNG demand appears capped in the near term.

Production Surges as Rig Count Climbs

Supply-side pressure continues to build. Lower-48 dry gas output hit 107.2 Bcf/d on Tuesday, up 3.9% from a year earlier.

Last Friday, Baker Hughes reported nine additional active gas rigs, pushing the total to 117—the highest in 17 months.

Meanwhile, U.S. gas demand on Tuesday was 78.1 Bcf/d, down 2.8% year-over-year. The widening gap between supply and demand reinforces the bearish tone.

EIA Storage and Supply Data Support a Bearish Case

Last week’s EIA report showed a +46 Bcf build, exceeding the +45 Bcf consensus and well above the five-year average of +41 Bcf. Inventories are now 6.2% above seasonal norms, despite being 4.9% lower year-over-year.

These stockpiles, paired with rising production and cooling demand forecasts, paint a picture of a well-supplied market heading into August.

Market Forecast: Downtrend Likely to Continue

With technical support broken, weather softening, and supply gaining ground, natural gas futures remain vulnerable to further downside.

Without a surprise spike in demand or LNG flows, the path forward continues to favor sellers through early August.

More Information in our Economic Calendar.