Natural Gas News: Bearish Forecast as Inventory Report and LNG Weakness Hit Futures

Natural Gas Futures Fall as Bearish Storage Build and Weak LNG Demand Pressure Market

Natural gas futures slipped Monday as traders reacted to a bearish combination of strong storage injections, soft LNG export demand, and only modest near-term weather-driven consumption. The front-month contract declined after posting gains last week, with fundamentals now tilting solidly in favor of the bears.

At 14:03 GMT, Natural Gas Futures are trading $3.606, down $0.178 or -4.70%.

Technically, momentum is pointing lower with the 200-day moving average the next target at $3.560. This is followed by a pair of main bottoms at $3.437 and $3.381.

On the upside, gains are being capped by three tops at $3.791, $3.832 and $3.859. The most important resistance is the 50-day moving average at $3.900.

Is the Market Responding to Oversupply Signals from the EIA Report?

The latest EIA report showed a 122 Bcf build in working gas for the week ending May 30, pushing total inventories to 2,598 Bcf. That puts stocks 117 Bcf above the five-year average and 288 Bcf below year-ago levels.

This marks the third straight week of triple-digit builds, underscoring ample supply ahead of the peak cooling season. The South Central and Midwest regions led the gains, adding 34 Bcf and 38 Bcf respectively—an indication that weather-driven demand remains too weak to dent storage growth meaningfully.

Can Heat in the West Overcome Soft Demand Elsewhere?

While temperatures are rising across California and the Desert Southwest—where highs are climbing into the triple digits—the broader U.S. is seeing only modest summer conditions. NatGasWeather reports that much of the Midwest, Plains, and Ohio Valley will remain in the 60s to low 80s through midweek.

This limits national gas demand, especially for cooling, and weakens the bullish case from weather-driven consumption. A hotter pattern is expected to emerge later in the week, but so far, it hasn’t been enough to counteract the weight of strong supply.

LNG Feed Gas Volumes Underperform on Extended Maintenance

Adding to the bearish tone is weak U.S. LNG export demand, which stood at just 13.5 Bcf/d on Monday, per Wood Mackenzie. Volumes remain subdued due to ongoing maintenance at two major Gulf Coast terminals—Sabine Pass and Cameron LNG.

Cameron’s turnaround has exceeded the usual one-month window, limiting throughput. Increased flows to Freeport and Plaquemines LNG are helping, but not enough to reverse the overall export slowdown.

Short-Term Outlook: Bearish Pressure Expected to Continue

With strong inventory builds, subdued LNG demand, and only limited support from weather-driven consumption, the short-term outlook for natural gas remains bearish.

Traders should watch for signs of broader heat expansion or a rebound in export flows, but until then, price rallies may struggle to hold. The market appears well-supplied heading into the core summer season.

More Information in our Economic Calendar.