Natural Gas News: Futures Test Key Pivot at $2.145 as Market Awaits EIA Storage Report

Natural Gas Futures Edge Higher Despite Bearish Pressures

U.S. natural gas futures edged higher ahead of Thursday’s U.S. government weekly storage report. On Wednesday, prices briefly tested resistance at $2.252 but failed to hold, closing lower and confirming the downtrend. The market is now straddling a key support pivot at $2.145, which traders are watching closely. If buyers manage to establish a higher bottom, prices could retest the $2.252-$2.270 range, with a potential breakout toward the 50-day moving average at $2.366. However, if $2.145 fails as support, expect a retest of $2.021, with $1.882 as the next key downside target.

At 12:20 GMT, Natural Gas futures are trading $2.181, up $0.036 or +1.68%.

EIA Storage Report Anticipation

Traders are bracing for today’s EIA storage report, which is expected to inject 25-29 billion cubic feet (Bcf) of natural gas into storage, with consensus around 25 Bcf. This would be significantly lower than the five-year average build of 51 Bcf, likely due to warmer-than-usual weather across much of the eastern U.S. Combined with recent cooler temperatures in the West, this lighter-than-average build could lend some support to prices. Market volatility is expected to increase following the report’s release as traders adjust to the new data.

Weather Conditions and Market Demand

NatGasWeather forecasts mild weather across much of the U.S., with temperatures ranging from the 60s to 80s, limiting near-term demand. However, parts of the southern U.S. and the West continue to experience highs in the 90s and 100s, providing some regional support for cooling demand. National demand over the next seven days is expected to remain moderate, further capping the potential for significant price rallies.

Production Slowdown and LNG Demand

Natural gas futures saw a bounce earlier in the week as a slight reduction in U.S. production provided relief to a market facing oversupply concerns. Daily production levels have edged down, helping stabilize prices. Meanwhile, liquefied natural gas (LNG) exports remain strong, even as the Atlantic hurricane season continues, helping maintain export demand. These bullish factors have prevented deeper losses, but the market remains cautious as strong production continues to overshadow these positives.

Market Focus Shifting to Winter

With September underway, the focus is shifting from summer storage to winter heating demand. Although major natural gas producers like EQT and Coterra Energy have scaled back production, U.S. output remains robust at 101 Bcf per day. Elevated storage levels, now at 3.1 trillion cubic feet (Tcf), are keeping a lid on price rallies, as the market struggles to shake off bearish sentiment.

Market Forecast: Bearish with Downside Risks

Technically, natural gas futures face downside pressure as the $2.145 pivot holds critical importance. A failure at this level would likely send prices down to retest $2.021, with a further drop to $1.882 if selling intensifies. Resistance remains at $2.252-$2.270, and only a break above this range would signal a potential move toward $2.366.

Given current high production levels, moderate demand, and ample storage, the short-term outlook remains bearish. Expect further downside unless significant weather changes or supply disruptions provide a bullish catalyst.