Natural Gas News: Weak Demand and Mild Weather Cloud Forecast Despite Bounce

Natural Gas Futures Rebound, But Downtrend Persists as Storage Build Pressures Market

U.S. natural gas futures are struggling to regain upside traction after rebounding from a five-week low, with April contract expiration and short-covering giving temporary lift. Despite the recovery, the broader downtrend remains intact as a bearish EIA storage report and mild weather forecasts continue to weigh on sentiment.

At 10:54 GMT, Natural Gas Futures are trading $3.864, down $0.061 or -1.55%.

Can the Market Sustain a Reversal After Testing Key Technical Levels?

Thursday’s bounce followed a sharp decline that took prices below the 50-day moving average ($3.811), touching $3.732 before reversing higher. The rebound encountered resistance near $3.924—a key pivot level—early Friday.

If bulls can reclaim that level, a short-covering rally could extend toward $4.317. However, the downtrend suggests sellers will likely re-enter on rallies toward that resistance band.

A failure to hold the 50-day moving average would expose $3.732 once again, and a break below that level could accelerate losses toward the next support zone at $3.350.

EIA Storage Data Undermines Bullish Momentum

The latest EIA report confirmed a 37 Bcf injection into storage for the week ending March 21, exceeding the consensus estimate of 33 Bcf and contrasting sharply with the five-year average draw of 31 Bcf. Total working gas now stands at 1,744 Bcf, 6.5% below the five-year average and 24.2% below year-ago levels.

While supplies remain tighter than historical norms, the larger-than-expected build reinforces the market’s concerns about weaker heating demand and looser balances in the near term.

Mild Weather Outlook and Weak Demand Cloud the Bullish Case

Short-term weather forecasts show above-normal temperatures across the central and eastern U.S. from April 1–4, curbing late-season heating demand.

At the same time, dry gas production in the Lower 48 climbed to 106.8 Bcf/d (+4.8% y/y), while gas demand sank to 75.5 Bcf/d (–15.1% y/y).

LNG feedgas flows remain firm at 15.7 Bcf/d, offering some export support. However, wind power strength last week also reduced gas burn for power generation, softening total gas demand.

Will LNG Export Growth and Utility Demand Offset Bearish Near-Term Forces?

A modestly bullish undertone remains tied to longer-term LNG export expansion. The potential approval of the Commonwealth LNG terminal in Louisiana would signal renewed momentum for U.S. gas export capacity. Additionally, electricity output rose 0.9% y/y in the latest week, and 3.55% y/y over the past 12 months, supporting utility sector demand.

Market Forecast: Bearish Near-Term Bias Holds

Despite Thursday’s bounce, the market remains vulnerable. Mild weather, bearish storage data, and sluggish demand point to further downside pressure unless bulls reclaim $3.924 with conviction. Unless that pivot is retaken, the risk skews lower, with $3.732 and potentially $3.350 in view.

More Information in our Economic Calendar.