Natural Gas News: Bulls Defend Support—Is a Breakout Toward $3.529 in the Forecast?

Natural Gas Futures Hold Above 50-Day Moving Average as Bulls Eye Upside Extension

U.S. natural gas futures are holding firm above key technical levels early Tuesday, signaling potential for further upside if momentum sustains. November contracts are trading above the 50-day moving average of $3.301—a level now acting as a key near-term support.

The move follows a one-week high reached on Monday, supported by revised forecasts pointing to warmer-than-normal temperatures in early October.

At 13:25 GMT, U.S. Natural Gas Futures are trading $3.337, up $0.070 or +2.14%.

Will Technical Support Levels Keep Bulls in Control?

Traders are watching critical support at $3.301, with additional backing from Fibonacci retracement levels at $3.261 and $3.238. Deeper support zones include prior swing bottoms at $3.122 and $3.063, while the broader support base lies at $2.986 to $2.938. If momentum continues, resistance comes in at $3.459 and $3.489, with a further upside pivot at $3.529.

How Is Weather Forecasting Shaping the Near-Term Outlook?

Despite low national demand projected through early October due to mild temperatures across most of the U.S., updated models from Atmospheric G2 indicate a warmer shift in the eastern and southern states for October 4–13. This could drive higher power burn as air conditioning demand extends, providing a bullish undertone even as short-term demand remains subdued.

Two tropical systems—Hurricane Humberto and Tropical Storm Imelda—are unlikely to disrupt gas infrastructure or cause meaningful supply interruptions, limiting their market impact for now.

Are Supply Trends Still a Drag on Price Action?

Production remains a pressure point. U.S. lower-48 dry gas output hit 108 bcf/day on Monday, up 6.4% year-over-year, while demand increased 4.4% to 69.8 bcf/day. Although LNG feedgas flows rose 10.3% week-over-week to 15.8 bcf/day, ample supply continues to limit bullish breakout potential.

The EIA’s latest report was largely neutral, with a +75 bcf storage build slightly exceeding consensus (+74 bcf) but undercutting the five-year average (+76 bcf). Inventories are 6.1% above the five-year seasonal norm. Baker Hughes data showed a marginal decline in gas-directed rigs to 117, though still close to the recent high of 124.

Does Stronger Electricity Demand Tip the Balance?

Electricity output offers a modest supportive driver. Data from the Edison Electric Institute showed a 2.3% year-over-year increase in lower-48 power generation for the week ending September 20, and a 2.85% gain over the past 52 weeks. Sustained heat and higher power burn could help tighten the supply-demand balance in the coming sessions.

Market Forecast: Bullish Near-Term Tilt with Key Resistance in Sight

With futures holding above the 50-day MA and weather models adding demand potential, the near-term outlook leans bullish. A break above $3.459 could accelerate gains toward $3.529, provided production pressure doesn’t overpower demand signals. Traders should monitor how the market behaves near $3.301—holding this level could trigger a technical run toward higher resistance targets.

More Information in our Economic Calendar.