Natural Gas News: Can Upcoming Heat Spur Traders to Challenge Resistance

Will Natural Gas Bulls Hold Ground as Storage and Weather Steer Prices

U.S. natural gas futures are sliding early Tuesday as traders reassess the potential for a bullish reversal following Monday’s attempt at a bottom, with storage levels and weather demand steering near-term price direction.

Can Heat and Demand Overcome EIA’s Bearish Storage Build

The market remains anchored by robust storage levels, with the EIA reporting a 55 Bcf injection last week, bringing working gas in storage to 2,953 Bcf.

This early and aggressive pace of injections is acting as a ceiling for futures, limiting the upside even as traders eye the potential for a seasonal demand push.

Traders remain watchful for weather events that could meaningfully alter the current supply-demand balance, but no heat dome has formed that would trigger a sustained rally.

What Does the NatGasWeather Outlook Signal for Near-Term Demand

The latest NatGasWeather forecast shows July 7-13 bringing high national demand as much of the U.S. experiences highs in the mid-80s to 90s, with hotter 100s over the Southwest, Mountain West, and Northern Plains.

Portions of the East will also see highs in the 90s, while cooler 70s will linger near the Canadian border. The next 7 days will deliver strong national demand, supported by reduced wind generation that could enhance gas-fired power demand in the near term.

Will August Natural Gas Futures Hold Above Key Technical Levels

Technically, a move through $3.275 would negate Monday’s bullish reversal attempt, signaling a potential resumption of the downtrend.

Conversely, clearing $3.472 would confirm the bullish pattern, potentially triggering short-covering toward minor resistance at $3.574. A break above this could accelerate gains toward the 200-day moving average at $3.793 and the 50-day at $3.800.

However, with traders inclined to sell rallies, such levels would likely require a prolonged, intense heat event to clear resistance, which the market does not currently have in place.

Market Forecast: Cautious Bias with Weather-Driven Upside Risks

Near-term, U.S. natural gas futures are likely to remain under pressure from strong storage levels, but the risk skew favors potential upside if weather-driven demand surprises to the high side.

Should forecasts intensify with a more persistent heat pattern, prices could retest the $3.472-$3.574 zone, with momentum possible toward the $3.79-$3.80 levels.

Until then, traders should expect choppy price action, with rallies encountering resistance as the market weighs storage growth against seasonal demand strength.

More Information in our Economic Calendar.