Natural Gas News: Forecast Turns Cautious as Market Hits Resistance at $3.733

Natural Gas Struggles at Key Resistance as Weather Softness Caps Gains

U.S. natural gas futures are starting the week on firmer ground but face stiff resistance at the $3.733 level, a key short-term pivot. While buyers briefly pushed prices to $3.747 on Monday, the rally stalled as sellers stepped in, sending prices back to $3.703. This technical rejection underscores the market’s sensitivity to near-term weather demand, even as broader fundamentals point to tighter conditions.

At 12:14 GMT, Natural Gas Futures are trading $3.698, up $0.068 or +1.87%.

Is Storage Still a Drag or Already Priced In?

Traders are digesting last week’s bearish-leaning EIA storage report, which showed a 107 Bcf injection—nearly double the five-year average. While the headline figure was heavy, it came in slightly below top-end expectations and followed a stretch of mild weather. As a result, much of the bearish sentiment appears priced in. More importantly, regional inventory deficits remain stark, with the East and Midwest hubs showing year-over-year deficits of 21.7% and 24.4%, respectively. These regional shortfalls help explain why prices have found support despite a seasonally soft backdrop.

Will Weather Continue to Cap Upside Potential?

Mild spring temperatures are expected to dominate U.S. weather patterns from May 1–7, with most regions seeing highs between 60°F and 80°F. Cooling demand will be limited to the Southern tier, where some 90s are forecast, while minor heating demand may emerge in parts of the Midwest. Still, the lack of extreme conditions keeps a lid on residential and commercial gas use, muting any aggressive upward price momentum in the short term.

Export Demand and Supply Risks Offering a Floor?

Despite the soft weather narrative, structural demand factors remain firm. LNG feedgas demand rose 1.5% week-over-week to 15.8 Bcf/d, offering a stable export outlet supported by overseas buyers. U.S. electricity generation is also up 2.1% year-over-year, adding to power sector demand. On the supply side, dry gas production remains elevated at 105.6 Bcf/d, but rig counts have only ticked up slightly, reflecting a cautious approach by producers. Geopolitical noise is also growing louder, with proposed U.S. tariffs on Canadian gas imports introducing fresh supply-side uncertainty—particularly for the Northeast.

Short-Term Outlook: Bullish Setup Tempered by Weather Resistance

The near-term outlook for natural gas remains cautiously bullish, driven by solid export flows, regional storage tightness, and supply-side risks. However, Monday’s failure to hold above $3.733 highlights ongoing hesitation tied to weak weather-driven demand. If bulls can reclaim and hold above this level, a test of the 50-day moving average at $4.000 is likely. Conversely, a break below support could open the door to $3.391 and potentially $3.109. Traders should stay alert for shifts in weather patterns, which remain the biggest wildcard in the current setup.

More Information in our Economic Calendar.