Natural Gas News: Weak Demand and High Inventory Keep Prices Under Pressure

Natural Gas Futures Struggle to Hold Momentum

U.S. natural gas futures are edging lower on Friday as bulls once again failed to sustain momentum after breaching the 200-day moving average at $2.966. Despite briefly crossing into bullish territory, natural gas prices retreated, with traders identifying resistance between $2.937 and $3.110 as a key barrier.

This retracement zone proved more influential than the moving average itself, suggesting that upward momentum remains limited. On the downside, support sits at $2.825, with a break below this level likely to accelerate selling pressure towards the next targets of $2.702, $2.653, and $2.601.

At 13:55 GMT, Natural Gas futures are trading $2.916, down $0.054 or -1.82%.

Bears Push Back on Early Rally

Natural gas prices surged past the $3 mark earlier in the week, buoyed by bullish sentiment from winter demand forecasts and supportive inventory data. However, bears quickly reasserted themselves in Friday’s trading, erasing gains as the rally lost steam.

Market participants are closely watching the upcoming winter season, which typically drives demand for heating, but so far, resistance at higher price levels has tempered optimism. Despite steady gains over the past month, near-term price action remains choppy.

TotalEnergies Bets on LNG Growth

In the longer term, bullish outlooks on natural gas are supported by industry giants like TotalEnergies SE, which projects a 50% rise in liquefied natural gas (LNG) sales by 2030. During its annual investor meeting, the company highlighted LNG as a cornerstone of its growth strategy, with an expected 5-6% compound annual growth rate in LNG sales from 2023 to 2030.

TotalEnergies CEO Patrick Pouyanné underscored the role of natural gas in the company’s transition strategy, driven by rising global demand and supply security concerns.

Low Near-Term Demand Forecast

Weather forecasts from NatGasWeather indicate lower demand for natural gas over the next week, with much of the U.S. experiencing mild temperatures. While southern regions like California and Texas remain hot, overall demand for heating and cooling is expected to be low through October 9. This lower demand outlook is likely to keep a lid on prices in the short term, particularly as supply remains robust.

EIA Storage Report Provides Mixed Signals

The U.S. Energy Information Administration (EIA) reported a weekly storage build of 55 Bcf, bringing total working gas in storage to 3,547 Bcf. This figure is 127 Bcf higher than last year and 190 Bcf above the five-year average, indicating healthy supply levels heading into winter. Although storage injections were lighter than the five-year average of +98 Bcf, the current surplus provides a cushion against potential winter price spikes.

Market Forecast: Bearish Near-Term Outlook

Given the combination of strong resistance near $3, ample supply, and forecasts for low demand in the coming weeks, natural gas prices are likely to remain under pressure in the near term. While long-term fundamentals, such as increased LNG sales, support a bullish outlook, the immediate trend appears bearish, with downside risks intensifying if prices fall below key support levels.