The natural gas market has once again entered a phase of active growth. In recent trading sessions, U.S. Henry Hub futures recorded their strongest two-day rally since winter, rising above $3.2/MMBtu.
The main driver was weaker-than-expected U.S. storage injection data, along with updated forecasts for hotter weather in June, which increases expectations of stronger power sector demand. Analysts note that the market is beginning to price in the risk of faster inventory drawdowns during the summer.
Europe remains the key source of risk
The strongest pressure continues to come from Europe. Gas storage levels remain significantly below seasonal averages, while competition for LNG between Europe and Asia is intensifying. Additional premium is being built into prices due to ongoing disruptions in Qatari supply and risks surrounding the Strait of Hormuz. According to Rabobank, the market still underestimates the probability of a gas shortage in the winter of 2026/27, while several banks have already raised their TTF price forecasts for the second half of the year. Even temporary improvements in U.S.-Iran negotiations only provide short-term price relief without fundamentally changing the tight market balance.
LNG remains the key driver of the bullish scenario
The global LNG market remains the main supporting factor for prices. Following disruptions at Qatari export facilities and ongoing logistical risks in the Middle East, traders are pricing in higher geopolitical risk premiums. The International Energy Agency (IEA) notes that the expected wave of new LNG supply has been delayed, making the global market much more sensitive to any supply disruptions. As a result, even localized export issues can trigger sharp price movements in both Europe and Asia.
Base case: market retains upside potential
At present, the short-term trend remains moderately bullish. The market is supported by low European inventories, strong export demand for U.S. LNG, and weather factors in the United States. If summer heat turns out stronger than forecast and LNG supply remains constrained, prices may continue to rise for both Henry Hub and European TTF. Key indicators to watch in the coming weeks include the pace of European storage injections, U.S. inventory data, and any news regarding LNG supplies from the Middle East.
Near-term outlook
After breaking through resistance around the $3.00 level, NATGAS prices are approaching a strong resistance zone near $3.20, where moderate profit-taking on long positions and a pullback toward the now-support level of $3.00 are possible. A breakout above this resistance could lead to further upside toward the $3.30–3.35 range.
A truce between the U.S. and Iran, as previously noted in Natural gas rises amid LNG shortage and risks for Europe, could weaken the upward momentum.
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