Natural Gas News: Forecast Warns of Lower Prices Unless Weather Shifts Fast

Natural Gas Futures Struggle to Find a Floor

Look, U.S. natural gas futures are pretty much going nowhere this Wednesday morning — September Nymex is hugging the flatline after sliding hard the past couple of sessions.

Traders are sniffing around for a spark to reclaim that $2.885 level, which used to be a decent floor. Without a quick pop higher, the price action looks like it wants to drift toward that next major support down near $2.498.

The thing is, even if we get back above $2.885, that doesn’t flip the script — it just sets the stage for maybe building a base. Only then could we start talking about a push toward $3.148 and maybe the 50-day up near $3.500. But that’s a big “if” with the way production and weather are lining up right now.

At 13:13 GMT, Natural Gas Futures are trading $2.839, up $0.031 or +1.10%.

Cooler Weather and Record Output Keep Bulls on the Sideline

We’ve still got strong output — Tuesday’s Lower-48 dry gas production came in at 108.6 bcf/day, up more than 5% year-on-year. That’s near record highs, and with storage already north of 3,100 Bcf, it doesn’t take much imagination to see why sellers are still leaning on the market.

Weather’s no help for the bulls either. Updated forecasts cooled the outlook in the Northeast and Southeast for August 17–21, taking a bite out of late-summer cooling demand. Yes, there’s a warmer trend across the Midwest and Northeast for the following week, but it’s not enough to offset the near-term demand hit.

Supply Pressure Getting Backed Up in Storage

Here’s the thing — last week’s EIA report was technically bullish with just a +7 bcf injection versus the 5-year norm of +29 bcf. But the market’s looking past that because overall inventories are still nearly 6% above the 5-year seasonal average. Add in softer LNG flows (down 3.7% week-on-week to 15.4 bcf/day) and it feels like we’re heading into the shoulder season with more gas than we need.

Technicals Suggest More Work Before Bulls Can Take Control

Right now, $2.885 is the key ceiling for any short-term bounce. Above that, $3.148 is the swing top to watch, and clearing it could finally point toward $3.50. On the downside, $2.498 is the next line in the sand. If we break that, things could get ugly fast.

Bottom Line – Bearish Until Weather or Supply Shifts

More likely than not, the path of least resistance is still lower unless we get a hot weather surprise or some kind of production hiccup. The smart money probably keeps selling into rallies until we see a shift in either demand forecasts or storage trends. Buyers on dips are thin right now, so we’ll see how that plays out heading into late August.

More Information in our Economic Calendar.