Natural Gas News: Weather and Inventory Report Fuel Futures Rally Today

Can Natural Gas Hold Above $3.362 Pivot as Short-Covering Gains Momentum?

U.S. natural gas futures climbed Friday, supported by a bullish storage miss and hotter weather forecasts that triggered short-covering in oversold conditions.

The market is attempting to hold above its pivot at $3.362, with traders eyeing the next objective at $3.574, although major resistance remains near the 200-day and 50-day moving averages clustered around $3.795-$3.800.

At 12:15 GMT, Natural Gas Futures are trading $3.398, up $0.061 or +1.83%.

Will the EIA Storage Miss Fuel Further Gains?

The EIA reported a storage build of 53 Bcf for the week ended July 4, below expectations of 61 Bcf, signaling stronger demand and helping August Nymex natural gas settle higher by 3.83% on Thursday.

This smaller build aligns with seasonal trends while highlighting supply constraints and emerging summer demand pressures.

Inventories are now 6% below year-ago levels yet remain 6.1% above the five-year seasonal average, suggesting supply is still adequate but tighter than the market had priced in before the report.

Can Hotter Forecasts Sustain This Rally?

Weather models turned warmer in key regions, with above-normal temperatures projected for the West from July 20-24, supporting near-term cooling demand.

Although prior cooler forecasts for the Midwest and East temporarily weighed on prices earlier in the week, the shift back toward heat is reviving bullish sentiment.

Higher electricity output, up 1% year-over-year in the latest Edison Electric Institute report, is also reinforcing demand for natural gas-fired power generation during peak air-conditioning season.

Are LNG Exports and Production Trends Supporting Bulls?

LNG exports notched a two-month high, with estimated flows to U.S. LNG export terminals at 15.5 Bcf/day, up 4% week-over-week, providing an additional pillar of support for domestic demand.

Meanwhile, Lower-48 dry gas production dipped toward 104 Bcf/day, down from midweek highs of 106.3 Bcf/day, hinting at potential supply moderation if heat persists and upstream constraints appear.

Market Forecast: Near-Term Bullish but Resistance Caution

Short-term momentum for natural gas remains bullish following the EIA storage miss and hotter weather forecasts, with potential for a short-covering rally toward $3.574 and even $3.730 if momentum sustains.

However, rallies are likely to encounter selling pressure near the resistance cluster of the 200-day and 50-day moving averages near $3.795-$3.800.

Traders should view these rallies as opportunities for tactical positioning, with short-covering risks elevated in oversold conditions while recognizing that sustained upside may remain capped unless production cuts deepen or heat persists longer than forecasts currently suggest.

More Information in our Economic Calendar.