Natural Gas News: Breakout Above 200-Day Average Fuels Bullish Market Sentiment

Natural Gas Futures Climb as Technical Breakout Counters Supply Overhang

U.S. natural gas futures are ticking higher in Tuesday’s mid-session, extending Monday’s surge that propelled prices above the critical 200-day moving average at $3.544. Traders appear focused on technical upside momentum despite persistent fundamental headwinds, setting the stage for a potential test of the 50-day moving average near $3.900.

At 17:00 GMT, Natural Gas Futures are trading $3.738, up 0.044 or +1.19%.

Is the 200-Day Moving Average Providing a New Floor for Natural Gas?

The breakout above the 200-day moving average is drawing attention as a possible inflection point for bullish momentum. This level, now acting as a key support, may control short-term direction. Should the rally gather steam, bulls may target $4.186 in the coming sessions, contingent on sustained buying and weather-driven demand.

Early Tuesday trading was volatile, as futures dipped before reversing higher. Mild national weather and soft LNG export data tempered bullish expectations. Feed gas volumes to U.S. LNG terminals are projected to drop to a one-month low of 13.0 Bcf/d, according to Wood Mackenzie, weighing on sentiment.

EIA Storage Build Highlights Supply Pressure Despite Technical Optimism

Last week’s EIA storage report confirmed a 101 Bcf injection, exceeding both the five-year average of 98 Bcf and last year’s 84 Bcf increase. Inventories now stand at 2,476 Bcf—93 Bcf above the five-year average, although still 316 Bcf below 2024 levels. Strong storage builds continue to challenge upside potential, even as traders eye seasonal demand strength.

Meanwhile, dry gas production remains elevated at 104.5 Bcf/d (+2.9% y/y), and demand has slipped, with daily consumption falling to 97.3 Bcf. Power burn is also lagging, driven by a 4.4% year-over-year drop in electricity output for the week ending May 24, per the Edison Electric Institute.

Weather Models and Federal Reserve Trade Risks Could Tip the Balance

Warmer mid-June forecasts are offering some support. The EC model has trended hotter, aligning more closely with the GFS model and suggesting increased cooling demand. Forecasts for June 12–16 now include widespread 80s and 90s across key regions.

Additionally, a broader commodity rally tied to U.S. tariff announcements is helping lift energy markets. However, LNG flows and global demand remain inconsistent, particularly with Europe’s storage at just 47%—well below its five-year norm.

Short-Term Outlook: Bullish Bias Contingent on Technical Strength

While the fundamental backdrop remains heavy with oversupply and weak domestic demand, the technical breakout above the 200-day moving average is a meaningful development.

If this support holds and weather forecasts continue to trend hotter, natural gas prices could push toward $3.900 and potentially $4.186. However, upside progress is conditional on sustained export flows and stronger power sector demand. Near-term outlook leans bullish, but selectively so.

More Information in our Economic Calendar.