Natural Gas News: Counter-Trend Rally Targets $3.733 as Inventory and Weather Cap Gains

U.S. Natural Gas Futures Rally on Technical Breakout and Broader Market Optimism

U.S. natural gas futures ended the week on a strong note, breaking out of a three-day base above the 200-day moving average at $3.103 and finishing Friday sharply higher. The June contract posted its first weekly gain since late March, driven by bullish chart action, a supportive storage report, and improving sentiment tied to potential U.S.-China trade talks.

On Friday, Natural Gas Futures settled at $3.630, up $0.151 or 4.34%.

Will Technical Buying Extend the Rally?

After defending key support at $3.103 for three consecutive sessions, the June contract accelerated higher, targeting the 50% retracement of the $4.430 to $3.035 range at $3.733. Traders will watch this level closely as it represents a natural area for profit-taking or new short positions.

A confirmed close above $3.733 would signal further strength, potentially setting up a move toward the 50-day moving average at $3.966 and the short-term pivot at $4.062.

On the downside, minor support now stands at $3.354, with firmer backing at the 200-day average.

Inventory Build Offers Mixed Signals

Thursday’s EIA report delivered a 107 Bcf build for the week ending April 25, slightly under consensus expectations of 109 Bcf but nearly double the five-year average of 58 Bcf. While the year-over-year storage deficit remains notable at -17.8%, inventories now sit slightly above the five-year average at +0.2%.

This data supports a neutral-to-bullish near-term view but highlights that U.S. supply remains adequate heading into summer. In Europe, weaker-than-normal storage levels—39% full compared to the seasonal norm of 49%—may lend some longer-term support to LNG export demand.

Weather Remains a Headwind for Demand

Short-term weather forecasts are offering limited support for prices, with the May 1–7 outlook calling for light national demand. Most of the U.S. will see comfortable temperatures in the 60s–80s, with cooler 50s across parts of the Midwest and Plains. Hotter conditions in the far South could spark localized cooling demand, but overall, the setup suggests subdued consumption into next week.

Macro Optimism and Supply Fundamentals Lend Support

Friday’s gains were also fueled by broader market sentiment, as reports that China may engage in new trade talks with the U.S. helped drive risk-on positioning across asset classes. Meanwhile, Baker Hughes reported a modest increase in active gas-directed rigs, rising by 2 to 101. Though rig activity remains low historically, the uptick suggests producers may be responding to recent price strength.

Market Forecast: Cautiously Bullish

With technical momentum building and risk appetite improving, the short-term outlook leans bullish. However, weak weather-driven demand and resistance at key technical levels like $3.733 and $3.966 may cap gains unless fundamental support strengthens further. Traders should watch price action closely at these inflection points for signs of either continuation or reversal.

More Information in our Economic Calendar.