After declining in recent sessions, U.S. natural gas confidently held a key strategic support level at $3.00/MMBtu. This level became a turning point for Henry Hub: sellers’ attempts in May to push the market lower failed to gain traction, and the subsequent rebound was accompanied by rising open interest and improving fundamentals.
Analysts highlight strong demand in the $3.00–3.05 zone, which now serves as a critical technical support area.
Seasonal demand and LNG support the recovery
The current upward move is not driven by technical factors alone. The U.S. is entering the active phase of summer electricity consumption, and forecasts for hotter weather are boosting expectations for increased gas-to-power demand. At the same time, LNG export flows are recovering after spring maintenance outages, gradually reducing the supply surplus. According to market participants, if current weather conditions persist, the next target range is $3.25–3.50/MMBtu.
Europe remains the key supply-side risk
On the global market, tensions persist due to low gas inventories in Europe and uncertainty surrounding LNG supply from the Middle East. European storage levels are around 40%, significantly below comfortable levels for the start of the summer injection season. Any disruption in LNG supply could sharply increase competition between Europe and Asia for spot cargoes, which typically supports U.S. Henry Hub prices via the export channel.
Market outlook: above $3.00, buyers retain control
From a market structure perspective, the rebound from $3.00 appears to be forming a medium-term base. As long as prices remain above this level, the base case scenario is a move toward $3.25–3.50, with potential for higher levels if U.S. heat intensifies or new disruptions emerge in the global LNG market. Risks for the bulls remain, including high inventories and expected production growth in the second half of the year, as written in Natural gas holds above $3.00 amid escalating tensions in Middle East; however, for now, momentum is gradually shifting in favor of buyers.
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