Will Natural Gas Prices Hold Above Key Support Levels?
U.S. natural gas futures edged higher on Monday, finding support after briefly testing the key pivot at $3.733. However, the market remains under pressure, with resistance levels at $3.976, $4.169, and February’s high of $4.476 limiting upside potential. A failure to hold $3.733 could trigger a drop to the 50-day moving average at $3.439, a critical level controlling the intermediate trend.
The market’s recent strength follows a sharp decline last week, when April Nymex futures saw a three-day slide amid warming weather. Weekly spot gas national average prices tumbled to $3.480, reflecting widespread losses across major trading hubs. While Monday’s gains suggest some price stabilization, traders remain cautious as fundamental headwinds persist.
At 14:35 GMT, Natural Gas Futures are trading $3.899, up $0.065 or +1.70%.
Will Warmer Weather Keep Prices Under Pressure?
Weather forecasts remain a key bearish factor. Maxar Technologies projects above-normal temperatures from March 10-14 across the Rockies to the Atlantic, limiting heating demand. This follows an earlier February rally driven by storage tightness, but with winter demand winding down, concerns over consumption are resurfacing.
Lower-48 gas demand fell to 80.2 Bcf/d last Friday, marking a 10.3% year-over-year decline. Without a late-season cold snap, traders may struggle to find strong bullish catalysts. Despite last week’s 261 Bcf storage draw—above the five-year average—current trends indicate weaker consumption, keeping pressure on prices.
How Are Supply and LNG Exports Influencing the Market?
Production remains robust, with Lower-48 dry gas output at 107.8 Bcf/d, up 2.8% year-over-year. Meanwhile, LNG exports provide some support, with flows to U.S. terminals rising to 15.6 Bcf/d, a 2.1% weekly increase.
A potential long-term bullish factor emerged as the Trump administration lifted restrictions on new LNG export projects. Bloomberg reported that a decision on the Commonwealth LNG facility in Louisiana is approaching, which could eventually boost U.S. natural gas demand. However, in the short term, storage and weather are dictating price action.
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See all Natural Gas forecastsMarket Forecast: Further Downside Risk Looms
With warmer-than-normal temperatures limiting demand, the short-term outlook remains bearish. The $3.733 pivot remains a crucial support level—if it breaks, prices could test $3.439, where buyers may attempt to step in.
On the upside, any rally will require fresh catalysts, such as unexpected cold weather or stronger LNG exports, to gain traction. However, traders have shown a strong tendency to sell into rallies, capping upside potential. Without a fundamental shift in demand or storage, gains are likely to be met with selling pressure. For now, traders should prepare for continued downside risk, with selling opportunities emerging if support levels fail.
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