The 50-day moving average is showing a modest shift toward an intermediate bullish trend, suggesting that prices may target the 200-day moving average at $2.811 in the near term. However, the swing chart points downward, indicating that the broader trend is still bearish. A breakout above $2.482 would be needed to shift the main trend upward, with the 50% retracement level at $2.757 serving as a key upside target if this move is confirmed.
On the downside, key support levels remain at $2.252 and $2.214, acting as potential floors if selling pressure resumes. Tuesday's decline followed a rally that saw prices rise in six of the previous eight sessions, but technical resistance capped further gains, leading to a modest pullback.
Fundamentals remain bearish due to weak demand, driven by favorable weather patterns across most of the U.S. According to NatGasWeather, national demand will remain low over the next 4-20 days, with comfortable temperatures ranging from the 60s to 80s across much of the country. Although some parts of the southern U.S. will continue to see highs in the 90s, these conditions are less impactful late in the season.
HDDs (heating degree days) are projected to remain well below normal in the coming weeks, particularly in the northern U.S., as the region waits for more significant cold snaps. While southern states will experience higher-than-average CDDs (cooling degree days), they are unlikely to drive demand meaningfully higher. Overall, this weather outlook leans bearish, despite the ongoing tight supply-demand balance in the natural gas market.
Natural gas production remained below 100 Bcf/d on Tuesday, and feed gas flows to LNG export terminals hovered near 13 Bcf/d, reflecting steady, though unremarkable, demand. Meanwhile, spot market prices in the Southeast saw moderate gains, providing some regional price support.
Despite lower weather-driven demand, the current supply-demand balance has kept surpluses from growing significantly, helping to prevent a more substantial drop in prices.
Given the combination of weak weather-driven demand and ongoing technical resistance, the short-term outlook for U.S. natural gas prices remains bearish. Unless prices can break through the $2.482 resistance level, traders should expect continued pressure on prices, with potential tests of support near $2.252 and $2.214.