Natural gas drops below $4 as mild weather and storage build pressure prices
Natural gas futures trade near $3.96 after storage surprise, resistance rejection
Natural gas futures (NYMEX: NG1!) are under renewed pressure, slipping toward $3.96 after failing to sustain gains above the $4.13–$4.20 resistance zone. The commodity remains trapped within a descending channel on the 4-hour chart, reflecting persistent bearish pressure.
This technical setup has prevailed since early March, with sellers stepping in at every attempt to break the resistance. While the broader trend showed strength in February, recent action indicates consolidation between $3.80 and $4.20, with repeated rejections from key levels and a breakdown from a rising wedge pattern reinforcing the bearish tone.
The short-term demand zone at $3.80–$3.85 has held thus far, but a decisive breach below this support could expose the market to a deeper pullback toward $3.60. Until buyers can reclaim the $4.13 level with volume confirmation, the bias remains skewed to the downside. Overhead, $4.55 continues to act as a strong confluence zone, combining horizontal resistance and trendline intersection, while momentum indicators show declining strength.
Natural gas price dynamics (June 2024 - March 2025) Source: TradingView.
First storage injection of the season adds downside risk
Fundamentals have further fueled the bearish narrative. The U.S. Energy Information Administration (EIA) reported a surprise 9 Bcf build in storage for the week ending March 14 — the first injection of the year — amid expectations of a flat or slightly negative draw. The build was attributed to increased renewable generation and weaker heating demand as warmer-than-average weather blankets much of the country. Current forecasts project continued mild conditions into early April, further undercutting late-season residential and commercial gas use.
Despite total inventories still sitting below the five-year average and LNG exports rising to 16.0 Bcf per day, market sentiment has turned cautious. Traders appear more focused on weakening demand dynamics than on supply-side tightness. Any meaningful price rebound may require a surprise cold front or a sudden disruption to production.
Market outlook: Consolidation with bearish tilt
Looking ahead, the $3.924 pivot will be the key level for traders next week. A close below this may invite further losses, although a drop toward the long-term 52-week moving average near $2.825 remains a distant scenario. With no clear catalysts on the horizon, Natural Gas is likely to remain range-bound, with a bearish tilt unless weather or supply shifts inject fresh momentum.
In past coverage, we noted how Natural Gas was facing compression below multi-month trendline resistance and that any rally would need to overcome overhead congestion zones. That view continues to hold, with bears dominating below $4.13 and the lack of seasonal demand reinforcing downside risk.
