Natural Gas News: Weather Forecast and Weak Demand Drag Futures into 200-Day MA

Natural Gas Drops Sharply as Technical Pressure and Light Demand Weigh on Market

U.S. natural gas prices slumped at mid-session Wednesday, pressured by technical selling and tepid short-term demand forecasts. Although prices briefly bounced during Tuesday’s position-squaring session, bearish sentiment quickly regained control, sending futures lower and dragging attention back to key support levels.

At 16:10 GMT, U.S. natural gas is trading $3.575, down $0.169 or -4.51%.

Is the 200-Day Moving Average Now the Key Battleground?

Prices have struggled to sustain gains, with the 50-day moving average hovering near $4.000 acting as psychological resistance. Traders have yet to mount a serious challenge at that level, and instead are eyeing the 200-day moving average at $3.531 as the next line of defense. A clean break below could open the door to further losses, with downside risk extending to $3.444 and possibly $3.338 in the short term.

June Nymex futures saw early gains, climbing 10.2 cents to $3.500/MMBtu in light volume before sellers re-entered, reversing the momentum. The July contract, set to become the prompt month, also jumped to $3.807 before retracing. Despite early strength, the market’s technical posture remains fragile heading into the June contract’s expiration.

Is Weather Holding Back Bulls Despite Long-Term Supply Tightness?

The near-term weather outlook remains a bearish overhang. Forecasts through June 3 call for cooler temperatures across the eastern half of the U.S., including Texas and the South, dragging national demand lower. Daily highs are expected in the 60s to 70s for much of the East, with some 70s to 80s in the South—significantly below levels needed to drive cooling demand.

Conversely, the West is expected to remain hot, with highs in the 80s to 100s, but this regional strength is insufficient to lift overall consumption. Traders are watching the forecast for June 4–9 closely, when a broader warming trend could emerge across the eastern U.S. with highs in the 80s and 90s, potentially reviving bullish bets.

Can Strong Structural Demand Expectations Offset Spring Supply Builds?

Market participants remain caught between near-term supply pressure and a bullish longer-term view. Large seasonal injections typical for spring continue to add weight to prices, with storage buildouts competing against a robust forward supply-demand outlook. According to EBW Analytics, this tension is at the heart of current volatility, as the market attempts to reconcile immediate softness with structural tightness.

Market Forecast: Bearish Near-Term Bias Until Support Holds or Weather Turns

Given the light demand outlook and recent technical weakness, the short-term bias remains bearish. A break below $3.531 could invite additional selling pressure, with price targets near $3.444 or lower. While the longer-term structural story remains constructive, bulls will likely need hotter weather or a firm bounce off major support to regain control.

More Information in our Economic Calendar.