Natural Gas News: Bearish Forecast Today as Cooler Weather and Rising Supply Pressure Prices

Natural Gas Pressured as Weather Outlook Cools and Production Surges

U.S. natural gas futures extended losses for a second session Tuesday, pressured by moderating weather forecasts, rising domestic output, and softening LNG export demand. August contracts dropped to a one-week low, drawing attention to key technical support near $3.149 after sellers gained control early in the week.

At 13:29 GMT, Natural Gas Futures are trading $3.251, down $0.074 or -2.23%.

Is the Weather Forecast Losing Its Bullish Bite?

Traders pulled risk off the table following a cooler shift in U.S. weather models. While much of the southern two-thirds of the country remains hot, with highs in the 90s and low 100s, updated GFS and EC models showed a net reduction of five cooling degree days (CDDs) over the weekend.

Temperatures in the Northeast and Midwest are now expected to moderate from late July into early August, with Vaisala projecting an active storm track that could cap cooling demand during July 31–August 4.

LNG Exports Dip as Gas Supply Trends Higher

Another pressure point for prices is the ongoing softness in LNG exports. U.S. LNG net flows on Monday totaled 14.9 bcf/day, down 4.9% week-on-week, according to BNEF. This drop coincides with signs of stronger supply. U.S. dry gas production reached 107.4 bcf/day to start the week—up 4.8% year-on-year—while rig activity hit a 17-month high of 117, per Baker Hughes.

Storage Data and Demand: Are the Bulls Getting Squeezed?

Last week’s EIA storage report added to the bearish tone. Inventories rose by 46 bcf for the week ending July 11, slightly above consensus and the five-year average of +41 bcf. U.S. gas inventories now sit 6.2% above their five-year seasonal average, despite being 4.9% lower year-on-year.

Meanwhile, electricity demand offers limited support: U.S. power output rose just 1.1% y/y in the latest weekly report, a modest lift relative to expectations for peak summer cooling demand.

Will Technical Levels Offer Support or Fuel a Breakdown?

Technically, support rests at $3.149, the July 9 low, while near-term resistance stands at the $3.389 pivot. Major resistance remains further above at the 50- and 200-day moving averages of $3.700 and $3.797, respectively.

A break below $3.149 could trigger accelerated selling, especially if weather trends continue cooling and production climbs.

Market Forecast: Bearish Near-Term Outlook

With a cooler temperature outlook, firming supply metrics, soft LNG exports, and storage trends pointing to ample availability, the near-term outlook for U.S. natural gas remains bearish.

Unless weather models reverse course or export demand recovers materially, further downside risk persists heading into early August.

More Information in our Economic Calendar.