The 200-day MA at $3.537 has now shifted from support to resistance, reinforcing bearish sentiment in the short term. While recapturing this technical level would indicate that selling pressure is easing, there’s no clear sign that buyers are actively defending it. Thursday’s close at $3.52 and Friday’s failure to rebound confirm that the market remains technically fragile, with sellers willing to press on if near-term support fails.

Will Cooler Weather Crush Summer Demand Expectations?

Weather remains a headwind for bulls. Updated forecasts from NatGasWeather and Commodity Weather Group show cooling across the central and eastern U.S. through early June. Highs in the 60s to 70s and widespread thunderstorms will limit early summer cooling demand, especially in key markets like Texas. The West remains hot, but it’s not enough to lift national demand, which is expected to stay light for at least the next seven days.

Does EIA’s Storage Build Reinforce Oversupply Risks?

Thursday’s EIA report confirmed a +101 Bcf injection for the week ended May 23, matching consensus but exceeding the five-year average of +98 Bcf. Storage now sits at 2,476 Bcf—93 Bcf above the five-year average and 316 Bcf below last year’s level. Dry gas production hit 106.2 Bcf/day (+3.7% y/y), while demand reached 69.0 Bcf/day (+4.2% y/y). LNG exports rose slightly, but total electricity output declined 4.4% y/y, highlighting weak power burn demand for gas.

Can LNG and Export Demand Offset Domestic Headwinds?

LNG flows to U.S. export terminals reached 14.4 Bcf/day, up 2.4% week-over-week, providing modest support. But global signals aren’t encouraging either. European gas storage was just 47% full as of May 26, well below the 58% five-year seasonal average. This suggests limited short-term uplift from overseas demand, keeping the U.S. market heavily reliant on domestic consumption and weather shifts.

Market Forecast: Bearish Near-Term Outlook

With technical momentum pointing lower and bearish catalysts stacking up—from subdued weather-driven demand to healthy storage builds—natural gas prices are likely to face continued downside pressure. Unless bulls reclaim the 200-day MA and weather patterns shift hotter, traders should brace for a retest of $3.381 and potentially deeper lows.

More Information in our Economic Calendar.