Natural Gas News: Bulls Target $3.300 as Supply Tightens and Chart Levels Hold

Natural Gas Futures Test Resistance as Bulls Eye $3.30—but Will Sellers Return?

U.S. natural gas futures edged higher early Wednesday as the October Nymex contract climbed 9.0 cents, fueled by technical buying and production outages. Prices surged to $3.131 after testing short-term support at $2.880–$2.836 earlier in the week, breaching Monday’s high of $3.065. While bullish momentum has firmed, traders remain cautious, with many viewing rallies as sell opportunities near key resistance levels.

Can Technical Support Hold as Production Slips in Permian and Appalachia?

Pipeline maintenance and flow data revealed sharp day-over-day output declines in both the Permian and Appalachia—two critical producing regions. This supply dip offered fundamental backing to Wednesday’s rally, with daily lower-48 dry gas production reported at 107.0 Bcf/d, up 4.8% year-over-year, but still showing short-term softness.

This softness aligned with a new short-term support zone shifting higher to $2.913–$2.861, tightening the range for active traders. A breakout above $3.131 opens the door to test the intermediate pivot at $3.238, with stronger resistance seen near the 50-day moving average at $3.300—levels where sellers are likely to re-enter.

Weather Outlook Cools Bullish Enthusiasm

Despite technical gains, weather-driven demand remains subdued. NatGasWeather forecasts mild temperatures across the Midwest, Northeast, and parts of the South through September 8, reducing cooling demand. Atmospheric G2 also projects below-average temperatures for the East into mid-September. Light national demand continues to weigh on any sustained upside, reinforcing the need for stronger catalysts to hold above $3.00.

Is Tighter Supply Enough to Offset Cooling Demand?

Last week’s EIA storage build of just +18 Bcf came in well below the +27 Bcf consensus and the 5-year average of +38 Bcf, offering some support. Storage levels are now -3.5% year-over-year but remain +5.0% above the 5-year seasonal norm. LNG exports remain steady at 15.2 Bcf/d, while lower-48 gas demand was 71.2 Bcf/d (+1.2% y/y).

Meanwhile, active gas rigs declined by 3 last week to 122, just off the recent 2-year high. Although rig counts are rising from last year’s lows, the drop this week could support price stability if production doesn’t quickly rebound.

Market Forecast: Bearish Near $3.30 Unless Production Drops Deepen

While technicals suggest short-term upside toward $3.238–$3.300, the broader setup remains bearish unless production losses persist or demand surprises to the upside. Mild weather and solid storage cushion limit upside potential. Expect sellers to emerge on rallies near resistance, with downside risk increasing if prices retreat below $2.913 support.

More Information in our Economic Calendar.