Natural Gas News: Chart Signals Point to Rally, But Weak Demand Clouds Forecast

Natural Gas Futures Edge Higher as Traders Weigh Technical Strength Against Weak Demand

U.S. natural gas futures ticked slightly higher on Tuesday following a choppy start to the week, as traders assess bullish technical signals against weak short-term fundamentals. Monday’s sharp selloff — an 8.0 cent drop — reflected profit-taking after a strong run fueled by short-covering and mildly supportive inventory data. Now, prices are pressing against key technical levels that could determine the next leg.

At 13:48 GMT, Natural Gas Futures are trading $3.576, up $0.026 or +0.73%.

Will Technical Momentum Break Through Resistance?

After bouncing from the 200-day moving average at $3.113 in late April, natural gas is now approaching the 50-day moving average near $3.90. In between, traders are eyeing technical pivot levels at $3.391 (support) and $3.733 (resistance), with momentum suggesting a possible test of the $4.00/MMBtu mark. EBW Analytics noted that the technical setup favors further gains, citing price strength and the potential for continuation of the rally if these levels hold or break higher.

Is Weather Demand Falling Short of Market Expectations?

Weather forecasts continue to underwhelm in terms of demand generation. NatGasWeather’s May 5–11 outlook points to widespread mild conditions across much of the U.S., with highs largely in the 60s to 80s and only isolated regions seeing cooler 50s or hotter 90s. This balanced temperature regime is contributing to very light national demand, limiting support for prices from the weather front. Traders looking for an early-season cooling demand bump may be disappointed.

Storage and Supply Trends Still a Headwind

Even as technicals lean bullish, fundamentals remain pressured by expectations of elevated storage injections in May. Analysts suggest this month could rival historic build levels, which would cap upside potential unless demand surprises to the upside. The return of supply concerns may already be filtering into price action, with the prompt-month contract stalling at resistance despite a broadly supportive chart.

Outlook: Bullish Bias, But Capped by Weak Fundamentals

Near-term price action points to a bullish bias, with strong technicals providing a path toward $4.00/MMBtu. However, lackluster weather-driven demand and ample storage projections are strong headwinds. Without a catalyst from either heat-driven cooling demand or a supply disruption, rallies are likely to face resistance. Traders should watch the $3.733 and $3.90 levels closely — breaks above could open room higher, but a failure would reinforce the ceiling set by soft fundamentals.

More Information in our Economic Calendar.