Natural gas prices have stabilized after an extended selloff, with the market finding support from expectations of stronger cooling demand across large parts of the United States. Forecasts for above-normal temperatures in Texas and other key consuming regions are expected to increase electricity generation demand, partially offsetting the bearish impact of seasonal inventory injections.
The latest EIA report showed U.S. underground storage increased by 32 Bcf, broadly matching market expectations and reinforcing that supply remains comfortable, but not excessive.
Middle East tensions continue to support the global LNG market
Although U.S. Henry Hub prices remain primarily influenced by domestic fundamentals, the geopolitical backdrop continues to support international natural gas markets. The conflict between the U.S. and Iran, persistent security risks around the Strait of Hormuz, and ongoing threats to regional shipping continue to keep LNG supply concerns elevated. The International Energy Agency recently warned that the Middle East conflict is reshaping global gas balances and keeping international LNG prices under upward pressure despite the gradual recovery of export flows.
Market focus shifts toward demand, LNG exports and Fed expectations
Recent U.S. macroeconomic data have strengthened expectations that the Federal Reserve could adopt a less restrictive policy stance later this year if inflation continues to moderate. Lower interest rate expectations generally improve the outlook for industrial activity and energy demand, although traders remain cautious as economic growth has yet to show a decisive acceleration. At the same time, LNG exports continue to provide structural support for U.S. natural gas demand, while AI-driven growth in electricity consumption remains an increasingly important long-term theme for the sector.
Technical outlook points to consolidation after sharp decline
The technical picture suggests that Natural Gas is attempting to stabilize following its steep decline. As shown on the chart, prices have recovered from the recent lows but continue to trade below the 200-period moving average, indicating that the broader trend has yet to turn bullish. Short and medium-term moving averages have flattened, reflecting the loss of bearish momentum and the emergence of a consolidation phase.
Immediate support is located around $2.88-2.90, while initial resistance is seen near $2.95-3.00. A sustained move above the psychological $3.00 level would improve the short-term outlook and expose the market to a recovery toward $3.10-3.15. As I noted in Natural gas extends rebound as storage report and Gulf risks shape outlook, failure to hold above current support could bring renewed selling pressure and another test of the $2.80 area.
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