Natural Gas News: Market Holds Key Support Zone as Weather Forecast Drives Uncertainty

Natural Gas Holds Inside Key Retracement Zone as Traders Weigh Supply and Demand Risks

Natural gas futures are treading water late Friday, holding within a key retracement zone after two straight sessions of testing support. Prices remain caught between technical support and fundamental pressure, with traders watching whether demand signals and weekend weather updates can tip the balance.

At 19:24 GMT, Natural Gas Futures are trading $2.942, up $0.008 or +0.27%. The low of the session is $2.897.

Can Natural Gas Hold the $2.887–$2.947 Retracement Zone?

The market has been grinding inside the $2.887 to $2.947 retracement zone, derived from the recent $2.695 to $3.198 short-term range. This zone has now held for two consecutive days, signaling a potential stabilization, but there’s no clear bullish follow-through yet. A sustained hold here could mark the formation of a secondary higher bottom, setting the stage for a potential rebound.

On the upside, the 50-day moving average at $3.200 remains the first resistance level to clear, followed by the pivot at $3.238. A breakout above that could trigger momentum buying with an upside target near $3.579. For now, the market appears pinned by technical resistance and a lack of fresh demand drivers.

EIA Storage Build Exceeds Forecasts, Undermining Bullish Momentum

Thursday’s EIA report posted a 71 Bcf injection for the week ending September 5, topping expectations of 68 Bcf and well above the five-year average of 56 Bcf. Inventories now sit 6% above seasonal norms, despite being 1.3% below year-ago levels. The bearish surprise contributed to Thursday’s selloff, keeping bulls on the sidelines.

High U.S. production is compounding the oversupply narrative. Lower-48 dry gas output reached 107.3 Bcf/day Thursday (+7.0% y/y), while feed gas flows to LNG terminals slipped to 14.6 Bcf/day, down 3.9% week-over-week. Lower-48 demand remains soft at 71.7 Bcf/day, down 1.2% year-over-year, per BNEF.

Will Warmer Weather Help Shift Demand Higher?

While short-term demand remains low, forecasts are starting to tilt warmer. Vaisala sees elevated temperatures returning to the East for September 16–20, with broader above-normal warmth expected nationwide through September 25. That could support gas burn for power generation, especially in the South where highs will stay in the 80s to low 100s.

Electricity output rose 1.03% year-over-year last week, according to the Edison Electric Institute, offering a mild tailwind for gas demand. Still, traders appear unconvinced without a more immediate demand spike.

Market Forecast: Neutral-to-Bearish as Range Holds

Natural gas remains range-bound, holding inside a key retracement zone but lacking bullish momentum. Unless prices break above $3.200 or incoming weather drives a pickup in demand, the market is vulnerable to renewed downside pressure. A close below $2.887 would open the door to a retest of August’s low, while a breakout above $3.238 is needed to confirm a bullish shift. For now, the tone remains neutral-to-bearish.

More Information in our Economic Calendar.