Natural Gas News: Today’s EIA Report and Cooler Weather Fuel Bearish Market Forecast

Will EIA Storage Data and Cooler Forecasts Weigh on Natural Gas Prices?

U.S. natural gas futures are trading slightly higher Thursday in quiet action ahead of today’s EIA Weekly Storage report, with the market holding inside Wednesday’s range.

Traders are balancing profit-taking with light position squaring as the market remains heavy after prices tumbled to a six-week low on Wednesday.

The immediate technical picture remains bearish below $3.149, with downside potential to $2.885 if bearish momentum accelerates, while swing top resistance is seen at $3.574, and major resistance aligns with the 200-day and 50-day moving averages near $3.794–$3.800.

Can Strong Heat Offset the Cooling Trend in Weather Models?

NatGasWeather projects strong national demand this week with high pressure maintaining 90s across the East and widespread 100s across the Southwest and Mountain West.

However, recent weather data, particularly the EC model, has trended cooler for the 8–15 day period, especially across the northern half of the U.S., leading to softer expectations for cooling-driven demand.

Vaisala forecasts also indicate cooler temperatures in the Midwest for July 14–18 and in the eastern half of the country for July 19–23, pointing to lower natural gas demand for power generation as traders reassess the strength of heat-driven consumption.

Will EIA Storage and Production Data Keep Pressure on Prices?

Expectations for today’s EIA report are for a +61 Bcf build for the week ending July 4, above the five-year average injection of +53 Bcf, reinforcing market concerns about comfortable supply.

Last week’s EIA report showed inventories rose +55 Bcf, above consensus, with stocks +6.2% above the five-year average, underscoring adequate storage levels despite being down 5.8% year-over-year.

European storage levels are also supportive for supply confidence, with stocks at 61% capacity compared to a five-year seasonal average of 70%.

How Do Production and Power Demand Factor Into the Outlook?

Lower-48 dry gas production remains strong at 105.3 Bcf/day (+3.6% y/y), while demand fell to 77.5 Bcf/day (-8.6% y/y), highlighting the near-term oversupply environment.

LNG net flows to U.S. export terminals stand at 15.0 Bcf/day (+0.9% w/w), maintaining steady export demand but insufficient to fully offset domestic oversupply.

Meanwhile, the Edison Electric Institute reported a +1% y/y increase in U.S. electricity output last week, reflecting a positive driver for baseline natural gas demand from utilities, although not enough to overshadow the cooler weather risk.

Market Forecast: Bearish Bias Holding

The near-term outlook remains bearish for natural gas, with the combination of cooler weather forecasts, strong production, and above-average storage builds outweighing steady export and power demand.

A move below $3.149 would reinforce downside momentum toward $2.885, while resistance near $3.574 and the $3.794–$3.800 zone will likely cap rallies unless weather models turn materially hotter.

Traders should remain cautious, with a bearish bias favored into the EIA data release and early next week’s trade.

More Information in our Economic Calendar.