Natural Gas tests key support as September rally fades
Natural Gas is trading around $3.06 on October 1 after a sharp pullback from the recent peak above $3.40. On the 4-hour chart, September momentum has clearly lost strength: price has fallen below faster moving averages and is now approaching the $3.03–3.06 area, where the slower moving average is located.
At the same time, longer-term structure does not yet look broken, as the market remains above the $2.95–3.00 area, where the latest upward move began.
Storage builds add seasonal pressure
Pressure on prices is currently coming from inventories and seasonal factors. After relatively moderate summer injections, the pace of storage builds is accelerating again as demand for air conditioning declines.
Inventories remain comfortable relative to the five-year average, while EIA forecast still points to high storage levels by the end of injection season. As a result, it is becoming more difficult for the market to justify a sustained price significantly above $3.20 without a new weather-related or export-driven catalyst.
LNG demand limits downside
On the other hand, LNG continues to limit the room for a deeper decline. U.S. export terminals are operating at high utilization rates, while demand from global market remains strong. Middle East is providing additional support: risks to supplies through Strait of Hormuz and disruptions along individual routes continue to maintain an elevated risk premium in global gas market.
For U.S. Henry Hub, this matters not directly, but through competition for LNG, as any problems with Middle Eastern supplies increase interest in U.S. volumes.
$3.20 turns into key resistance
As a result, the market is now balancing between strong domestic supply and high external demand.
The loss of support around $3.20–3.15 could weaken bulls' position, but as long as price remains above $3.00–2.90, they continue to maintain control of the situation. This means that attempts to retest those levels, now as resistance, are still possible from current prices. A break above $3.20, as noted in Natural gas corrects from $3.40 as storage cushion limits upside, would open the way toward $3.30–3.40, while a loss of $2.90 could lead to a decline toward $2.80–2.70.
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