Natural Gas News: Futures Risk More Losses if Storage Data Overpowers Demand Boost

Natural Gas Futures Hold Support but Face Resistance as Storage and Output Weigh

U.S. natural gas futures are attempting to stabilize after testing key long-term support, but gains remain capped by strong resistance levels and persistent oversupply concerns. September Nymex contracts held above $2.885 after dipping to $2.881 on Monday, with short-covering supporting an intraday rebound.

Early Tuesday trading saw the prompt month range between $2.909 and $2.985, but upside progress remains challenged by resistance at $3.148, $3.294, and major technical ceilings at the 50-day ($3.500) and 200-day ($3.868) moving averages.

At 13:15 GMT, Natural Gas Futures are trading $2.877, down $0.077 or -2.61%.

Will Rising LNG Exports Offset Storage Pressures?

Strength in LNG exports is offering some near-term demand support. Estimated LNG feedgas flows reached 16.5 Bcf/d Monday, up 7.1% week-on-week, helping to limit selling pressure. Cooling demand also remains firm as high pressure dominates most of the U.S., keeping highs in the upper 80s to 100s, especially in the Southwest and Texas. However, cooler temperature forecasts for the eastern U.S. from August 16–20 could ease power burn demand from air conditioning, trimming support.

On the bearish side, traders remain focused on storage. The EIA reported a smaller-than-expected +7 Bcf injection for the week ended Aug. 1, but expectations for the week ended Aug. 8 point to a much larger build, well above last year’s 2 Bcf withdrawal and the 33 Bcf five-year average injection. End-of-season storage near 4.0 Tcf remains the consensus, keeping oversupply concerns intact.

Production Near Record Highs Keeps Bears in the Game

Dry gas production remains near record territory, hitting 109.4 Bcf/d on Monday, up 6.3% year-on-year. The Lower 48’s gas rig count slipped by one last week to 123, just off the recent two-year high, but overall drilling activity remains strong. While total U.S. electricity output rose 0.9% year-on-year in early August—supporting gas demand from utilities—the supply side continues to outweigh incremental demand gains.

Can Technical Support Hold Against Market Fundamentals?

The $2.885 long-term support level has held so far, but technical traders remain cautious. A failure to hold above $2.900 could invite fresh selling toward the recent low at $2.881.

Bulls would need a sustained break above $3.148 to shift sentiment toward the next resistance at $3.294. Without a sharp drop in production or an unexpected demand spike, the 50-day and 200-day moving averages remain distant targets.

Market Forecast

Near term, the market leans bearish despite holding key support. Strong production, storage builds above seasonal norms, and cooler forecasts for the East outweigh the support from LNG exports and short-term heat-driven demand.

Unless prices can clear $3.148 with conviction, rallies are likely to be capped and retests of sub-$2.90 levels remain in play.

More Information in our Natural Gas Futures.