The current rise in natural gas prices primarily appears to be a recovery following the significant decline seen earlier this spring. At that time, prices were pressured by comfortable inventory levels, mild weather conditions, and stable production.
The market is now gradually recovering part of those losses, while traders are once again pricing in geopolitical and logistical risk premiums.
LNG becomes a key driver again
Global LNG markets are providing the main source of support for natural gas prices. Ongoing uncertainty surrounding Middle Eastern supply routes, combined with intense competition between Europe and Asia for available LNG cargoes, is fueling concerns about the global supply-demand balance. In addition, Europe continues to inject gas into storage facilities ahead of the next heating season, supporting demand across international markets.
Seasonal demand strengthens upward momentum
Forecasts for above-average temperatures across the United States and parts of Europe are expected to boost gas consumption for power generation. Rising demand from utilities, together with strong U.S. LNG export volumes, is reducing the amount of gas available on the domestic market. This seasonal factor is helping buyers maintain control of the short-term trend.
Overall market outlook
Despite the recent rebound, the current advance still looks more like a recovery move following the previous sell-off than the beginning of a new long-term bull market. A sustainable uptrend would likely require further inventory drawdowns, continued strength in global LNG demand, or fresh supply disruptions. For now, however, the fundamental backdrop remains moderately supportive, allowing prices to stay in recovery mode.
Near-term outlook
The rebound in NATGAS from support around $2.88 and the move back above $3.00 increase the likelihood of a test of resistance in the $3.08–3.10 area. However, as noted previously in Natural gas extends decline as geopolitical risk premium fades, downside risks are likely to persist while prices remain below this resistance zone.
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