Natural Gas News: Futures Dip as $3.148 Resistance Holds Despite Bullish EIA Report

Natural Gas Slips Despite Bullish EIA Data and Strong Cooling Demand

U.S. natural gas futures were lower for a second straight session on Friday, with the September contract trading weaker after failing to extend Thursday’s rally.

Prices formed a new minor top at $3.148, with upside resistance seen at $3.301 and the 50-day moving average at $3.500. On the downside, support is set at $3.021, followed by $2.895 and long-term support at $2.885.

At 13:01 GMT, Natural Gas Futures are trading $3.038, down $0.029 or -0.95%.

Why Didn’t the Bullish EIA Report Lift Prices

Thursday’s EIA storage data came in sharply below expectations, showing a +7 Bcf build versus estimates near +12–15 Bcf and a five-year average injection of +29 Bcf for this period. The miss was largely attributed to reduced wind power generation, especially in ERCOT, which boosted gas-fired electricity demand. Even so, the prompt-month contract settled Thursday at $3.067, down 0.32%, as traders shifted focus to cooling weather forecasts for the eastern half of the U.S. in late August.

Production Growth and Rising Rig Counts Weigh on Sentiment

Bearish supply-side factors continue to counterbalance bullish demand drivers. Lower-48 dry gas production stood at 108.7 Bcf/d on Thursday, up 5.7% year-over-year, while active U.S. gas rigs hit a two-year high of 124. Increased output has been a key reason prices fell to a 3.5-month low earlier this week, with the market wary of sustained production strength heading into the lower-demand shoulder season.

Cooling Demand Strong Now, But Market Eyes Later Slowdown

For the week of August 7–13, forecaster NatGasWeather sees a broad upper ridge dominating much of the U.S., bringing highs in the upper 80s to 100s, especially in the Southwest and Texas. National demand is expected to remain high for the next seven days, supported by LNG feedgas flows of 15.5 Bcf/d, up 10.1% week-on-week. Still, the market reaction has been muted as traders weigh strong near-term cooling demand against the prospect of easing weather-driven consumption after mid-month.

Is the Market Setting Up for a Bearish Short-Term Break

Despite the bullish EIA surprise and robust LNG exports, the market remains technically capped below $3.148. Failure to break above this level could trigger a retest of $3.021 and potentially $2.895.

Elevated production, high rig counts, and cooler late-August forecasts for the eastern U.S. are limiting the upside case.

Unless prices can reclaim $3.301 and sustain momentum toward the $3.50 mark, the short-term bias leans bearish, with traders likely to fade rallies until weather or supply fundamentals shift decisively.

More Information in our Economic Calendar.