Natural Gas News: Natural Gas Futures Extend Losses Below $2.887 Support Level

Natural Gas Slips as Bearish Pressure Builds Below Key Resistance

U.S. natural gas futures edged lower on Tuesday as sellers extended control after prices fell below short-term support, with technical indicators now suggesting deeper downside risk. The October contract remains under pressure following last week’s bearish storage data and rising production, while only limited weather-driven demand is offering modest relief.

At 13:10 GMT, Natural Gas Futures are trading $2.786, down $0.02 or -0.71%.

Are Natural Gas Inventories and Production Outweighing Weather Demand?

Monday’s 3.5-week low came as a continuation of last Thursday’s negative sentiment after the EIA reported a +90 Bcf inventory build—well above the five-year average of +74 Bcf and higher than the market expectation of +81 Bcf. As of September 12, U.S. inventories stood 6.3% above the five-year seasonal average, despite being 0.3% below last year. This oversupply backdrop continues to weigh heavily on prices.

Production remains robust. Lower-48 dry gas output hit 106.7 Bcf/d on Monday, up 4.1% year-over-year, while U.S. gas rigs remain near a two-year high. Although unchanged at 118 rigs last week, the count has climbed steadily from the September 2024 low of 94. The EIA also nudged up its 2025 production forecast to 106.63 Bcf/d, reinforcing bearish supply expectations.

Can Weather-Driven Demand Offset Supply Pressures?

There was a minor intraday recovery Monday due to warmer-than-expected forecasts. Atmospheric G2 raised temperature expectations for late September into early October, especially across the central and northern U.S., which could lift cooling demand. NatGasWeather is also calling for upper 80s to 90s across the southern U.S., but overall national demand remains soft, categorized as “LOW” after midweek.

Electricity demand is providing limited support. The Edison Electric Institute reported a 0.83% year-over-year rise in power output for the week ending September 13, and a 2.98% increase over the past 52 weeks. However, gas demand remains muted, with Monday’s lower-48 consumption at 70.8 Bcf/d, down 5.5% from a year ago. LNG feedgas flows were also weaker at 14.4 Bcf/d, down 5.6% week-over-week.

Where Are Key Technical Levels Now Driving Sentiment?

Technically, natural gas futures broke below the short-term retracement zone at $2.887–$2.947, which now acts as resistance. The next major upside hurdle sits at the 50-day moving average near $3.080, with stronger resistance at $3.238. On the downside, traders are now targeting the $2.695–$2.647 support band, with little near-term bullish momentum to defend it.

Short-Term Outlook: Bearish Bias Prevails

With storage levels well above seasonal norms, record production, and only modest weather-driven demand, the outlook remains bearish in the short term. Traders are likely to test support near $2.65 unless a sharper uptick in demand or a weather event materializes.

More Information in our Economic Calendar.