Natural gas futures price struggles as mild weather and surging supply stoke bearish momentum
Natural gas futures fail to break resistance near $3.165 as soft demand and high output weigh on prices
Natural gas futures remained under pressure on Monday, trading near $3.15/MMBtu after logging a five-day losing streak followed by a modest bounceback. The weakness stems largely from an unusual confluence of mild spring weather, stubbornly high production, and soft demand across key consumption hubs.
Despite modest attempts to recover, the broader technical and fundamental setup remains tilted toward the downside.
Recent weather patterns across the U.S. have delivered near-perfect temperatures—too warm to spur heating demand, yet not hot enough to trigger substantial air conditioning use. This shoulder-season lull has created a vacuum in demand at a time when U.S. dry gas production remains near record highs, averaging 104.4 Bcf/d, up 3.8% year-over-year. As a result, the market is experiencing accelerated storage builds, with the latest EIA report showing an 88 Bcf injection—well above the 75 Bcf consensus and the five-year average of 58 Bcf.
Natural gas price dynamics (March 2025 - April 2025) Source: TradingView.
Technical resistance stalls recovery attempts
From a technical standpoint, natural gas remains trapped in a well-defined descending channel. The commodity is testing resistance at $3.165, just beneath the 50-day EMA at $3.178.
A decisive breakout above this zone could target $3.253 or even $3.342. However, failure to breach resistance may trigger renewed selling pressure, dragging prices back toward $3.047 or even $2.880. Weekly charts also suggest the path of least resistance remains lower, especially with prices poised to fall below the key 52-week moving average of $2.918.
Outlook: More downside unless supply tightens or summer heat arrives
While LNG exports and electricity demand offer modest support, they are insufficient to offset the larger oversupply narrative. LNG flows dipped 3% week-over-week to 15.3 Bcf/d, while domestic gas demand declined 7% year-over-year. Unless meaningful production cuts emerge or weather conditions drive up power sector consumption, natural gas is expected to remain on the defensive into May.
In prior outlooks, we noted that a breakout above the $3.165–$3.253 resistance cluster was essential to shift sentiment. Without such a move, rallies are likely to fade into further downside continuation.
