Natural Gas News: Weather-Driven Demand Falls Short; Traders Target 200-Day Moving Average

Futures Eye 200-Day Moving Average as Heat in Texas Fails to Lift Broader Demand

U.S. natural gas futures extended losses for a third consecutive session on Wednesday, signaling increasing bearish sentiment as traders assessed weather outlooks, production data, and storage levels. After failing to break through resistance at $3.733 and the 50-day moving average near $3.900, prices are now targeting support near $3.438, with a growing possibility of a deeper pullback toward the 200-day moving average at $3.146.

At 13:37 GMT, Natural Gas Futures are trading $3.518, down $0.129 or -3.54%.

Can Record Heat in Texas Offset Mild Weather Elsewhere?

While record-setting heat across Texas and the Southwest has sparked strong regional cooling demand, the rest of the Lower 48 remains largely temperate. According to NatGasWeather, temperatures in the East and West are holding in the 60s to 80s, which is keeping national demand close to seasonal norms. The result is limited upside for natural gas despite early season strength in the ERCOT region.

Though the next few days will bring elevated heat across parts of the South, the broader U.S. weather pattern remains unsupportive of a sharp demand spike. Cooling in Texas over the 7–15 day period, even if modest, is expected to bring highs into the 80s–90s, keeping national cooling degree days slightly above average but not enough to significantly tighten balances.

Is EIA Storage Data Reinforcing Bearish Pressure?

The latest EIA report showed a 104 Bcf injection into storage for the week ending May 2, overshooting analyst expectations of +101 Bcf and far exceeding the five-year average build of +79 Bcf. This has weighed heavily on prices, especially considering that inventories now sit at 2,145 Bcf—just 30 Bcf above the five-year average, but 412 Bcf below year-ago levels.

Despite the year-on-year deficit, the market appears more focused on the near-term build rate, which signals adequate supply. European storage data adds further context: inventories are just 43% full versus a five-year average of 53%, pointing to weaker comparative demand globally and potentially freeing up U.S. LNG cargoes.

Will Technical Support Levels Hold as Sentiment Slips?

With natural gas prices breaking down from established resistance and heading toward key support at $3.438, a technical bounce is possible on first contact. However, market sentiment and supply-side data suggest any rebound may be short-lived. If this level fails to hold, the next likely target for sellers is the 200-day moving average at $3.146.

Market Forecast: Bearish

Given soft national demand outside of Texas, stronger-than-expected storage builds, and the inability to hold above key technical resistance levels, the near-term outlook for natural gas remains bearish. Traders should watch closely for a potential breakdown below $3.438, which could accelerate the push toward $3.146.

More Information in our Economic Calendar.