Natural Gas News: Futures Rebound on Short-Covering Ahead of Key EIA Report Today

Futures Bounce on Short-Covering but Stay Constrained by Bearish Conditions

Natural gas futures are seeing modest gains Thursday morning, supported by profit-taking and short-covering ahead of the weekly U.S. storage report.

At 14:14 GMT, U.S. Natural Gas futures are trading $3.141, up $0.064 or +2.10%.

After shedding more than 48 cents over the last three sessions, August Nymex gas was trading higher. However, the broader technical picture remains bearish, with the market still under pressure after breaking key support levels earlier in the week.

Prices have been in a steep downtrend since the market opened with a gap lower on Sunday night. Wednesday’s break below the July 9 low at $3.149 puts the multi-month low of $2.885 squarely in view.

While the current move higher may offer some upside room for a short-covering rally, bears are likely to remain in control unless the contract can clear key resistance at the 50-day moving average ($3.700) and 200-day moving average ($3.794).

How Might the EIA Storage Report Impact Market Sentiment?

The EIA’s storage report, due at 14:30 GMT, is a key driver today. Forecasts from major analysts show expectations for an injection near +30 Bcf, right in line with the five-year average.

NGI estimates a 30 Bcf build, while a Reuters poll projects an average of 33 Bcf. Weather patterns during the reporting period were mixed—cooler-than-normal across central U.S. and Texas but hotter in the West and East.

With storage surpluses still near +175 Bcf, today’s number is unlikely to dramatically alter the fundamental picture unless it deviates significantly from expectations. A smaller-than-expected build could spark additional short-covering, while anything higher may reassert bearish pressure.

Could Strong Heat or LNG Demand Reverse the Trend?

Despite near-term technical weakness, traders are keeping a close eye on weather and LNG exports for possible upside triggers. NatGasWeather projects strong high pressure dominating most of the U.S. through July 30, with highs in the upper 80s to 100s—especially in the Southwest and Texas. While heat supports demand, the cooler northern tier may temper national consumption.

Without a major production disruption or a significant surge in LNG demand from Europe, the market appears to lack the catalysts needed to sustain a rally. That said, strong power burns from heat and any supply hiccups could temporarily lift prices.

Market Forecast: Bearish Until Technical Resistance Breaks

Near-term, the market remains bearish below $3.149 and especially while it trades under the 50- and 200-day moving averages. Unless today’s storage number comes in surprisingly low or a material change hits demand or supply, rallies are likely to be met with renewed selling. Traders should watch for a retest of the $2.885 support zone if bearish momentum resumes.

More Information in our Economic Calendar.