Natural Gas News: Traders Turn Cautious as Futures Near 50-Day Moving Average Level

Natural Gas Stalls Below Key Resistance as Traders Turn Cautious Ahead of Weekend

U.S. natural gas futures eased on Friday as traders hesitated to chase the recent rally, with prices pulling back ahead of the weekend and failing to test critical resistance levels. After nearly two weeks of gains, October futures fell short of surpassing Wednesday’s high at $3.131, reflecting a more cautious tone as traders weighed uncertain weekend weather forecasts and strong technical ceilings just above current levels.

Will Weather Cool Off the Recent Rally?

Forecast models shifted cooler for key demand regions, cutting into expectations for late-season air-conditioning load. The northern Midwest and Southwest are both expected to see below-normal temperatures from September 10–14. A similar cooling trend is now projected for the Northeast by mid-month, although some warmer signals remain for the Mid-South and Midwest later in the same period. The overall forecast suggests lighter demand ahead, pressuring bulls to lock in profits before the weekend.

Production Strength Keeps Pressure on Prices

High output levels continue to weigh on the market. Friday’s Lower-48 dry gas production came in at 108.2 Bcf/day, up 5.6% year-over-year, according to BNEF. Meanwhile, Lower-48 demand was 74.4 Bcf/day, down 3.7% year-over-year. The EIA also raised its 2025 and 2026 U.S. gas production forecasts to 106.44 and 106.09 Bcf/day, respectively. While LNG feedgas flows remain supportive at 15.2 Bcf/day, the supply-demand imbalance persists.

Storage and Power Demand Show No Urgency

Thursday’s EIA report showed a +55 Bcf injection for the week ending August 29, matching expectations but exceeding the five-year average build of +36 Bcf. Inventories are now 5.6% above the five-year seasonal norm, despite being 2.2% below year-ago levels. The Edison Electric Institute added another bearish datapoint, reporting an 7.82% year-over-year drop in Lower-48 electricity output for the week ending August 30—pointing to weaker power burn demand.

Technical Resistance Looms Large

With Friday’s action stalling below the weekly high at $3.131, the market remains capped by the 50-day moving average near $3.200 and the 50% retracement level at $3.238. These levels remain key resistance. A break above could open the door to $3.579 and possibly the 200-day moving average at $3.937. On the downside, a pullback toward $2.913 or even $2.861 is possible, with stronger support in the $2.695–$2.647 range.

Market Forecast: Bearish Tilt While Resistance Holds

The recent rally has paused, and without a fresh bullish catalyst—such as a sudden heat wave or surprise production drop—natural gas appears vulnerable to downside. Cooler weather outlooks, robust production, and strong resistance levels suggest sellers may regain control in the short term. Bias turns bearish unless bulls can push decisively through $3.238.

More Information in our Economic Calendar.