Daily Natural Gas
The next technical hurdle lies at $3.039, with stronger resistance building at $3.221 — a swing top — and clustering with a 50% retracement at $3.238 and the 50-day moving average at $3.300.
A move above this zone could force more short-covering, but many market participants suggest large sellers are waiting to reestablish bearish positions at higher levels. With no new demand catalyst and production near record highs, upward momentum could face stiff resistance.
Bullish EIA Inventory Miss Lifts Futures, But Weather Trends Turn Bearish
Thursday’s EIA report helped fuel the rally, showing an +18 Bcf storage build versus expectations of +27 Bcf and a five-year average of +38 Bcf. This surprise bullish miss gave bulls enough momentum to extend gains, though weather outlooks remain broadly bearish.
Vaisala forecasts cooler-than-normal conditions across much of the U.S. from September 4–8, curbing late-summer cooling demand. Atmospheric G2 also flagged cooler temperatures for the eastern two-thirds of the U.S. heading into early September.
Production Surges While Demand Slips—Is the Rally on Thin Ice?
U.S. dry gas production reached 107.1 Bcf/day on Thursday, up 3.1% year-over-year and near record highs. Meanwhile, lower-48 demand fell to 72.4 Bcf/day, down 15.2% from a year ago. LNG exports held at 15.4 Bcf/day, up modestly week-over-week, but not enough to offset surging supply.
Storage remains adequate, with inventories +5.0% above the five-year average. These fundamentals point to a still-loose market, making the recent price recovery vulnerable unless supported by stronger demand or export growth.