Natural Gas News: Futures Target 50-Day MA and $3.238 Resistance in Bullish Setup

Natural Gas Bulls Eye Resistance as Temperatures Tick Higher

U.S. natural gas futures are showing strength to end the week, with prices inching closer to a key resistance zone near $3.20–$3.238. Traders are watching this area closely, as it includes both the 50-day moving average and the 50% retracement level, where initial selling pressure is likely. A decisive break above $3.238 with strong volume would shift the short-term momentum sharply higher, potentially opening the door to the three-month pivot at $3.579 and, if sustained, the 200-day moving average at $3.937.

At 14:30 GMT, Natural Gas Futures are trading $3.090, up $0.016 or +0.52%.

Can EIA Inventory and Weather Data Sustain the Rally?

Thursday’s EIA report showed a storage build of +55 Bcf for the week ending August 29, in line with expectations and above the 5-year average of +36 Bcf. Total stocks now stand at 3,272 Bcf, which is 5.6% above the five-year seasonal average and down -2.2% from last year. The report did little to move prices but confirms that storage remains comfortably supplied, limiting the upside potential unless demand picks up meaningfully.

Weather continues to be a swing factor. NatGasWeather reported light national demand for early September, as mild conditions dominate the Midwest, Northeast, and parts of the South. However, updated forecasts from Atmospheric G2 suggest a warming trend for the central and northern U.S. from September 9–18, potentially increasing electricity-driven gas demand in the short term.

Is Surging Production Limiting Price Upside?

Despite near-term demand optimism, high U.S. production remains a headwind. BNEF data shows Thursday’s Lower-48 dry gas output at 107.1 Bcf/day, up 4.6% year-over-year. Rig activity has also climbed to a two-year high, signaling continued supply strength. LNG export flows slipped to 15.0 Bcf/day, down 3.5% week-over-week, further softening demand-side support. The EIA recently raised its production forecasts for 2025 and 2026, underlining longer-term supply pressures.

Electricity demand data added another bearish layer. The Edison Electric Institute reported a 7.82% year-over-year drop in Lower-48 electricity output for the week ending August 30. While some of this may reflect seasonal cooling trends, it further weakens immediate gas burn expectations.

Will Natural Gas Break Higher or Face Resistance?

Price action remains constructive but vulnerable near resistance. A breakout above $3.238 could attract technical buyers and momentum traders targeting the $3.579 pivot. However, the fundamentals remain mixed. Storage is ample, production is strong, and demand remains weather-dependent. Until stronger heat materializes or exports rebound, rallies are likely to face selling pressure.

Short-term Outlook: Neutral-to-Bullish
A near-term test of resistance is underway. Bulls need a firm break above $3.238 to sustain momentum. Otherwise, expect a pullback toward support at $2.913.

More Information in our Economic Calendar.