Natural gas price holds near $3.25 as traders eye supply growth and weather risks
Natural gas trades flat near $3.25 with resistance at $3.33
Natural gas traded near $3.25 on Thursday, locked in a narrow range as the market digested conflicting signals on demand, supply, and macro pressures. The price remains capped under a descending trendline, with immediate resistance at $3.33 and further upside limited by the 50 EMA at $3.37. A decisive break above this zone remains elusive amid weak momentum. Key support rests at $3.20, followed by a deeper floor near $3.08.
Although bulls have defended the $3.20 level so far, the absence of a strong catalyst and ongoing macro headwinds, including the potential for surprise inventory builds or a milder weather outlook, are keeping upside limited. Warmer-than-normal temperatures are forecast through May 1 across the Lower 48 U.S. states, likely curbing residential heating demand. LSEG projects U.S. natural gas demand will ease from 99.7 bcfd this week to 96.7 bcfd next week, while average production remains firm at 106.3 bcfd in April, a fresh record.
Natural gas price dynamics (March 2025 - April 2025) Source: TradingView,
Fundamental divergence builds as U.S. demand rises but output holds high
Despite near-term caution, long-term demand continues to grow. Kinder Mo rgan highlighted record Q1 natural gas usage in the U.S., with residential and LNG feedgas demand up 10% and 15% year-over-year, respectively. LNG exports remain elevated, with daily flows at 16.1 bcfd, although slightly below last week's average due to a dip in output from Cheniere Energy's Corpus Christi terminal.
On the supply front, output remains robust, but falling oil prices could slow drilling in key shale basins, reducing associated gas production. With crude futures down over 14% so far in April, potential rig pullbacks in the Permian and Bakken regions could offer medium-term support for gas prices.
European prices edge higher as storage builds begin
In Europe, natural gas futures rose modestly toward €35/MWh following last week’s 8% drop, aided by optimism over eased U.S.-China trade tensions. Milder and windier weather conditions are expected to boost storage injections. EU storage is just over 35% full, and flexibility in meeting the bloc’s 90% storage goal adds further leeway.
As noted earlier, natural gas remains vulnerable to bearish pressure below the $3.33 resistance. While structural demand from LNG and utilities is growing, the technical setup still calls for caution without a confirmed breakout.
