Natural Gas News: Bullish Forecast as Heat and LNG Demand Fuel Futures Breakout

Natural Gas Futures Surge as Heat and LNG Demand Drive Breakout

U.S. natural gas futures rallied sharply Monday morning, boosted by hotter weekend forecasts and stronger LNG feed gas demand. Prices nearly gapped higher at the open, signaling bullish momentum driven by technical and fundamental catalysts. A key breakout over the $3.362 pivot provided early support, with traders now eyeing additional resistance levels as potential near-term targets.

Is the Weather Model Revision Adding Fuel to the Fire?

Over the weekend, updated weather data injected fresh buying interest into the market. The American model added 12 cooling degree days (CDDs) and the European model added 2 CDDs, according to NatGasWeather. This sharp increase in heat-related demand expectations strengthened the bullish case, especially with peak summer temperatures pushing cooling demand higher. Heat remains a leading driver for short-term direction as traders weigh further midday model updates.

How Is LNG Feed Gas Demand Supporting the Rally?

LNG feed gas demand has climbed to nearly 17 Bcf/day, providing additional upside support. Rising export volumes are tightening domestic supply expectations just as summer cooling demand accelerates. This dual driver—stronger LNG outflows and hotter weather—is pressuring storage expectations and strengthening front-month contracts.

What Do Technicals Say After the Breakout Above $3.362?

The rally gained traction after clearing $3.362, now acting as a pivot support level. The next key resistance is the minor top at $3.574; a break above this level would confirm further bullish control. Beyond that, traders are watching the 50% long-term retracement at $3.730, the 50-day moving average at $3.795, and the 200-day moving average near $3.800. These zones represent potential resistance, but a strong close above $3.574 could open the door for an accelerated move toward them.

How Much Downside Risk Remains in the Near Term?

On the downside, the $3.362 pivot serves as immediate support, followed by the key bottom at $3.149. Unless prices fall back below these levels, the technical bias remains tilted to the upside. However, any bearish weather revisions or LNG disruptions could quickly test these levels.

Market Forecast: Bullish Momentum Likely to Continue

With weather models trending hotter and LNG demand approaching seasonal highs, natural gas futures are positioned for further gains. The technical breakout above $3.362 reinforces a bullish short-term view, with a test of $3.730–$3.800 likely if $3.574 is breached. Traders should monitor midday weather model updates closely for confirmation or reversal signals.

More Information in our Economic Calendar.