Natural Gas News: Trader Reaction to $3.529 Sets the Tone for the Week Ahead

Natural Gas Reversal Stalls as Warm Weather and Strong Output Overwhelm Bullish Storage Surprise

Natural gas futures ended last week higher, gaining 3.68% to settle at $3.324. But despite the upside move and a shift to a weekly uptrend, the failure to hold above key resistance highlights a market still weighed down by bearish fundamentals.

Can the EIA Storage Miss Spark Sustainable Upside?

The EIA reported a 53 Bcf injection for the week ending September 26—well below the consensus estimate of +64 Bcf and the five-year average of +85 Bcf. The market initially rallied on the miss, extending through the key weekly pivot at $3.529 and tagging $3.585. But the breakout failed to hold, and prices reversed into Friday’s close, underlining skepticism that a single bullish print can overcome broader oversupply concerns.

Will October Warmth Undermine Heating Demand?

Forecasts from Atmospheric G2 show temperatures shifting warmer across the central U.S. for October 8–12, with widespread heat expected from October 13–17. This pattern will limit heating degree days, stalling early-season heating demand.

With residential and commercial load still muted, traders are questioning whether recent rallies have priced in more than fundamentals support. Power burn remains the only weather-sensitive demand source, and while electricity output rose 5.96% y/y last week, it’s not yet tightening the market.

Is Surging Supply Still the Dominant Headwind?

Dry gas production remains a critical bearish driver. U.S. Lower 48 output reached 108.4 Bcf/d on Friday, up 5.4% year-over-year. Meanwhile, demand lagged at 66.4 Bcf/d, down 7.4% y/y. LNG exports remain firm at 15.7 Bcf/d, but haven’t been able to offset weak domestic consumption.

The Waha Hub in West Texas continues to print negative cash prices due to pipeline constraints, adding to the pressure on spot markets and reflecting persistent regional oversupply.

What Do Weekly Technicals Tell Us About Direction?

The weekly trend officially shifted higher after the market took out a swing top at $3.489 and broke through the $3.529 pivot to reach $3.585. However, strong selling at that level sent prices back to $3.324 into the weekly close.

Trader reaction to the $3.529 pivot will be crucial in the coming week. Recapturing $3.585 would confirm a continuation of the uptrend, with potential to test the 52-week moving average at $4.048. On the downside, the key weekly support range is $3.063 to $2.986.

Market Forecast: Neutral to Bearish Until $3.585 Breaks

Despite the weekly trend turning up, the failure to hold the breakout suggests bulls lack conviction. With strong supply, soft demand, and no immediate weather catalyst, natural gas futures are vulnerable to further downside unless $3.585 is decisively reclaimed.

A break below $3.063 would negate the recent trend shift and open the door for deeper retracement. Until then, the market is stuck in a battle between speculative upside and fundamental resistance.

More Information in our Economic Calendar.