Natural Gas News: Weather Forecast Crushes Demand Outlook, Futures Hit Fresh Lows

Natural Gas Futures Pressured by Cool Weather, Strong Supply as Key Support Cracks

U.S. natural gas futures started the week under pressure, gapping lower on Monday and continuing the slide that took prices to fresh nine-month lows. With mild late-summer weather slashing power burns and production holding strong, the market’s failure to hold $2.748 now puts $2.574 in the crosshairs—a level we haven’t seen since last fall.

At 13:44 GMT, Natural Gas Futures are trading $2.656, down $0.042 or -1.56%.

Are Weather Models Wiping Out Late-Summer Demand?

Look, the weather just isn’t doing the bulls any favors. Forecasts now call for an early taste of fall across the Midwest and East, with highs topping out in the low 80s and even dipping into the 60s in spots. That’s taking a serious bite out of cooling demand. Daily power burn has already dropped to 77.9 Bcf, and more softness is likely as we close out meteorological summer. More likely than not, we don’t see any heat-driven demand pop until the back half of September—if at all.

Can Production Keep Prices Pinned This Low?

If there’s a floor under prices, it’s not coming from the supply side. Lower-48 dry gas production pushed up to 108.4 Bcf/day on Friday—up more than 6% from last year. Rig counts are steady at 122, and the EIA just bumped its production forecast for 2025 and 2026. Bottom line? Supply isn’t blinking. That puts a cap on any upside move unless something breaks in either demand or LNG exports.

What Did That Storage Miss Really Mean?

Last week’s EIA report came in light at just +13 Bcf—well under the +35 Bcf five-year average. On paper, that’s bullish. But in practice? The market shrugged. Inventories are still 5.8% above normal for this time of year, and traders chalked up the miss as a one-off. Without sustained below-average builds, storage won’t help the bull case much.

Is $2.574 the Line in the Sand—or Just a Speed Bump?

Technically, the market’s walking a tightrope. With $2.748 now acting as resistance, the bears have the upper hand. The next major support sits at $2.574, and unless bulls show up with size—or a weather or geopolitical surprise hits—this level looks vulnerable. Even if we bounce, the daily swing top at $2.849 is likely to be a ceiling unless something fundamentally shifts. Any rally toward this price is probably more about short-covering than fresh longs stepping in.

Outlook: Still Bearish Until We See a Change in Weather or Supply

More likely than not, the path of least resistance remains lower. Until prices reclaim $2.748—and ideally $2.849—we’re still in sell-the-rip territory. Keep an eye out for a potential reversal candle as we approach the end of the month and the contract rollover, but don’t get too excited unless the weather flips or production falters. For now, the smart money is fading strength.

More Information in our Economic Calendar.