Natural gas remains under pressure as $3.05 support faces renewed test
Natural Gas is trading around $3.09–3.10/MMBtu on October 27, attempting to stabilize after a decline from October highs of $3.55–3.57. On the hourly chart, prices maintain a bearish structure, having formed a series of lower highs and lower lows.
Storage outlook offers limited price support
The U.S. market is entering the final stage of the gas injection season with relatively comfortable overall inventories, although the supply structure is gradually becoming less uniform. In its October forecast, the EIA expects inventories to increase to 3.850 Tcf by early November, approximately 2% above the five-year average.
However, market participants are becoming more interested not in the total volume of gas, but in the pace of its future withdrawals from storage facilities. The next EIA report, scheduled for October 29, will show the extent to which persistent warm weather continues to support additional inventory builds ahead of the heating season.
U.S. production recovery offsets LNG demand
On the supply side, the recovery in U.S. production after temporary disruptions in the first half of October continues to put pressure on prices. Producers are gradually restoring volumes to the market, while improving regional prices are encouraging increased supplies from shale basins.
The expansion of pipeline infrastructure also plays an additional role, allowing gas to be redirected from areas with excess supply to industrial consumers and export terminals. In particular, Kinder Morgan continues preparations for its Trident project, with a capacity of approximately 2 Bcf/d, which is expected to enter service in February 2027.
In the short term, the balance between stable production and utilization of existing LNG terminals remains more important. Strong export demand provides an additional source of consumption for U.S. natural gas, but limited capacity at certain facilities prevents the entire surplus of domestic supply from being quickly redirected to international markets. Therefore, even a significant increase in global LNG prices has yet to lead to a comparable rise in U.S. natural gas prices.
Bears retain advantage below $3.15 resistance
The bulls' inability to break through resistance near $3.15 indicates their weakness and the risk of another bearish attack on support at $3.05. Nevertheless, demand may persist in this area, allowing bulls to test the aforementioned resistance again. A break above it, as I noted in Natural gas slips below $3.10 as warm weather offsets supply risks, would lead to a rise toward $3.20–3.25, while a loss of support would trigger a decline toward $3.00 at a minimum.
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