Natural Gas News: Futures Extend Losses Today as Cooler Weather Cuts Demand Outlook

Natural Gas Futures Extend Losses as Cooling Forecasts Hit Demand Outlook

U.S. natural gas futures are under pressure early this week as traders weigh eroding summer power demand against robust production and rising inventories. August Nymex futures fell sharply, dropping 7.6% on Monday and extending lower Tuesday after breaking last week’s low at $3.403, moving further away from the 200-day moving average resistance at $3.785 and the 50-day at $3.800.

Technical signals on the daily chart suggest additional downside room with $2.885 emerging as the next major support level if bearish sentiment holds.

At 12:56 GMT, Natural Gas Futures are trading $3.387, down $0.069 or -2.00%.

Will Cooler U.S. Forecasts Pressure Natural Gas Demand Further

Short-term weather forecasts are shifting cooler across the central and eastern U.S. for July 10–14, softening the expected call on natural gas from power providers to meet air conditioning demand. NatGasWeather projects high demand through mid-week as much of the U.S. faces highs in the 80s-100s, with extreme heat of 105-115 in inland California and the Southwest, but a transition to moderate demand by late week as systems bring showers and cooler 70s-80s.

This transition aligns with Monday’s price weakness, with the EC model showing reduced Cooling Degree Day trends for the 10-15 day window, tempering bullish weather-driven bets for traders.

OPEC Competition and Production Data Weigh on Prices

Natural gas faces added pressure as fuel competition from other energy sources intensifies globally. Lower-48 dry gas production reached 107.4 Bcf/d on Sunday, up 3.9% year-over-year, while demand was at 74.3 Bcf/d (+6.7% y/y). LNG feed gas flows climbed to a seven-week high of 14.7 Bcf/d, signaling sustained export interest but not enough to offset easing domestic demand concerns.

Meanwhile, lower electricity generation, down 3.1% y/y to 91,334 GWh for the week ended June 21, reflects reduced call on gas-fired generation, adding bearish weight to the demand profile.

Can Rising Inventories Contain Upside Moves

Storage remains a key focal point for traders. The EIA reported a +96 Bcf injection for the week ended June 20, surpassing the +88 Bcf consensus and well above the five-year average of +79 Bcf. Inventories now sit 6.6% above the five-year seasonal average, reinforcing a comfortable supply backdrop, while European storage data and softer TTF pricing are adding to global bearish sentiment.

Short-Term Outlook: Bearish Bias Remains

With cooler forecasts, rising production, and above-average storage, the near-term outlook for U.S. natural gas remains bearish. Prices may continue to drift lower toward the $2.88 target if weather trends hold and the market continues to discount heat-driven demand expectations. Traders should watch for updated injection figures and mid-July weather forecasts as key drivers for positioning in the coming sessions.

More Information in our Economic Calendar.