Natural gas price rebounds as output dips and LNG demand surges
Natural gas prices rebound toward $3.74 on tighter supply and export demand
U.S. natural gas futures climbed more than 8% to hover above $3.7 per million British thermal units (MMBtu) this week, driven by a combination of declining domestic output, robust LNG export activity, and expectations for rising heating demand amid lingering seasonal chill. The rally marks a notable reversal from earlier declines that saw prices touch $3.43, with traders reacting swiftly to signs of tightening supply.
Average gas production in the Lower 48 states dropped to 105.9 billion cubic feet per day (bcfd) in early April, down from record March levels. Analysts anticipate further output weakness in the short term, potentially exacerbating inventory concerns. U.S. stockpiles are currently 3% below seasonal norms, according to the latest storage data, reflecting continued withdrawal pressure from winter demand and record exports.
Natural gas price dynamics (August 2024 - April 2025) Source: TradingView.
Export strength offsets macro headwinds
Record gas flows to liquefied natural gas (LNG) terminals are providing solid support for prices, as overseas demand remains resilient. LNG gas volumes have held near 15.8 bcfd in April, matching the previous month’s all-time high. This sustained export strength comes despite broader macroeconomic uncertainty, including escalating trade tensions between the U.S. and China. President Trump recently issued a 90-day temporary easing of some tariffs, though he raised levies on Chinese imports to 125%.
While demand optimism persists, gas prices remain technically fragile. On the daily chart, natural gas hovers around $3.74, attempting to hold above the $3.7 support base. However, price action remains below key technical markers—specifically, the descending trendline from the March highs, the 50-day EMA at $3.81, and the 200-day EMA at $3.9.
Technical outlook cautious despite bounce
A decisive break above $3.81 could signal a short-term bullish reversal, but momentum remains shaky. Immediate support lies at $3.63, with stronger downside risk emerging on a break below $3.43. If that fails, a deeper correction toward $3.19 is possible. Until prices reclaim $3.93, the broader bearish structure remains intact.
As highlighted in our earlier outlooks, U.S. natural gas markets remain highly reactive to both export volumes and domestic production shifts. The recent bounce aligns with our earlier expectations for a rebound from key support, though follow-through will depend on a clear break of resistance and stabilization in inventory trends.
