Natural Gas News: Traders Shrug Off Bearish EIA Report—Bulls Ready to Challenge Resistance Zone

Natural Gas Futures Rebound Toward Key Resistance as Traders Eye Supply and Weather Signals

U.S. natural gas futures are trading higher on Friday, clawing back Thursday’s losses and approaching key technical levels that could dictate the next directional move.

The front-month August contract is pushing toward the 50-day moving average at $3.700, a zone where sellers are expected to re-emerge. A decisive break above $3.799—the 200-day moving average—could ignite a more sustained rally, but failure to hold gains may open the door for a pullback toward $3.389.

At 13:35 GMT, Natural Gas Futures are trading $3.606, up $0.064 or +1.81%.

Is Stronger Electricity Demand Enough to Offset the Inventory Build?

Thursday’s weekly EIA report delivered a slightly bearish surprise, showing a +46 Bcf build in storage for the week ended July 11. This topped both expectations (+45 Bcf) and the five-year average (+41 Bcf), signaling that supply continues to outpace demand. Despite this, traders initially bid prices higher on weather-driven demand optimism before retreating on the inventory data.

Meanwhile, power sector demand continues to support the bullish case. U.S. electricity generation rose 1.1% year-over-year last week, reaching 98,133 GWh, according to the Edison Electric Institute. The 52-week output rose 2.4%, reflecting broader strength in utility demand. High air conditioning loads due to widespread heat in the East and Midwest are bolstering natural gas usage among power generators.

What Are Production and LNG Flows Saying About Market Tightness?

Fundamentals remain mixed. Lower-48 dry gas production hit 107.2 Bcf/d on Thursday, up 4.3% year-over-year, underscoring the supply side’s resilience. Domestic demand, however, dipped 1.6% year-over-year to 80 Bcf/d, according to BNEF. LNG exports also showed a slight week-over-week decline, with net flows down 2.2% to 15.3 Bcf/d. Though still historically robust, any sustained softness in export demand could weigh on prices.

European storage stood at 63% full as of July 15, trailing the five-year average of 72%. While this could eventually support U.S. LNG demand, the current gap suggests there’s no immediate pressure on European buyers to ramp up imports.

Could a Breakout Above $3.799 Shift the Near-Term Bias?

Technically, the $3.700–$3.799 zone is a critical inflection area. Traders often sell into rallies at these levels, and failure to break through could trigger a return to support around $3.389. But if bulls manage to push through the 200-day moving average, momentum could accelerate, especially with stronger weather-driven demand expected in the coming 6–7 days.

Market Forecast: Cautiously Bullish Near-Term Bias

The short-term outlook leans cautiously bullish, with supportive weather and power sector demand offsetting mildly bearish storage and production trends. A clear breakout above $3.799 would shift momentum in favor of the bulls, but until then, resistance-heavy trading and profit-taking are likely to cap gains. Traders should watch technical levels closely heading into next week.

More Information in our Economic Calendar.