Natural Gas News: Short-Covering Bounce in Play if Bulls Hold Crucial Support Today

Natural Gas Futures Eye Potential Rebound as Traders Gauge Support Levels

U.S. natural gas futures are trading slightly higher on Wednesday, consolidating for a second straight session within Monday’s broad trading range. With prices stuck between key support and resistance levels, the market is signaling indecision—an environment where a short-covering rally could catch traders off guard.

At 13:08 GMT, Natural Gas Futures are trading $3.043, up $0.033 or +1.10%.

Is Support Near $2.885 Setting the Stage for a Bounce?

The current trend remains bearish, but technical indicators suggest that the market is nearing a critical test. This week’s low of $2.895 is close to a major support level at $2.885. A clean break below that area could open the door to a steeper decline toward $2.498, a level that would represent a significant breakdown in sentiment.

However, if bulls defend this zone, it may attract opportunistic short-covering. The immediate upside target is Monday’s high at $3.078. A decisive move through this resistance could force weaker short positions to cover, triggering momentum toward the near-term pivot at $3.301. Still, any bounce remains within the context of a broader downtrend unless key technical levels are reclaimed.

Will the 50-Day Moving Average Continue to Cap Upside Momentum?

The long and intermediate trends are firmly bearish, and any bullish case hinges on a recovery above the 50-day moving average at $3.600. Further up, the 200-day moving average at $3.866 represents a deeper structural resistance level. Until these are regained, rallies are likely to be sold into, limiting upside potential for now.

Does Hotter Weather from August 8 Support a Demand Rebound?

From a weather standpoint, demand remains mixed in the short term. NatGasWeather projects moderate U.S. demand through Wednesday as cooler systems move across the East Coast and Northwest. However, hotter-than-normal conditions are expected to intensify August 8–20, especially in the Southwest and Texas, where highs of 90s to 110s should keep regional demand elevated. Live CDD data supports this view, showing a sustained rise above 10- and 30-year averages—a bullish tailwind if confirmed by actual consumption data.

Market Forecast: Bearish Bias with Short-Covering Risk

Despite the bearish technical setup, natural gas futures are approaching a potentially reactive support level. A clean hold of $2.885 combined with rising cooling demand could trigger a short-covering bounce toward $3.301. Still, without a break above $3.600, the broader trend remains intact. Traders should continue to view rallies as opportunities to sell unless the market reclaims key moving averages.

More Information in our Economic Calendar.