Natural gas is trading around $2.95-2.97/MMBtu on September 1, once again approaching the psychological $3.00 level after a series of higher lows. A positive factor is that the market is holding most of its recent gains despite persistently high production.
This suggests that supply is still not fully keeping pace with strong demand from power generation and LNG, while resistance around $2.98-3.00 remains critical. As long as this area is not cleared, the current recovery cannot yet be considered a fully established uptrend.
Storage surplus continues to narrow
The latest storage report supports this view. An injection of only 15 Bcf came in well below the seasonal norm, while the surplus versus the five-year average continued to narrow. What matters is not so much the absolute level of inventories, but the speed at which the previous excess is disappearing.
If the next reports confirm that injections remain weak even with high production, the market may begin to reprice the balance for autumn and the start of the heating season more quickly.
Export demand absorbs more supply
Another factor now is export utilization. LNG feedgas remains high, and any increase in external demand is beginning to have a faster impact on the U.S. domestic balance. Against this backdrop, record production no longer looks like an unequivocally bearish argument: the market is increasingly evaluating not the production level itself, but the gap between production growth and the growth in export and power-generation demand.
As long as this gap remains narrow, sellers may find it difficult to push NATGAS back toward the August lows.
Hormuz risk adds volatility near resistance
The Middle East is adding volatility, but for now it is not the main price driver. Escalation around Hormuz increases the risk of disruptions to global LNG and could potentially strengthen demand for U.S. supplies, but the market is waiting for confirmation through actual changes in flows rather than headlines alone.
Therefore, the near-term structure remains technical: a breakout above $3.00 would increase the chances of a move toward $3.05-3.10, while a return below $2.92-2.90, as noted in the article Natural gas stays under pressure despite renewed Hormuz risks, would weaken the momentum and reopen the way toward $2.86-2.85.
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