Natural gas price rally nears $3.60 breakout as heatwaves and supply shifts fuel momentum
Natural gas consolidates near resistance as breakout decision nears amid global demand shifts
Natural gas futures climbed over 1% on Wednesday to trade near $3.564, marking a test of the upper boundary of a long-standing symmetrical triangle pattern. The price is coiling between ascending support and descending resistance, signaling that the market is nearing a breakout decision.
Highlights
- Natural gas trades near $3.564 as symmetrical triangle breakout looms
- LNG diversion and EU’s 62% storage levels raise supply concerns amid North Asian heatwave
- A break above $3.60 could trigger upside toward $3.85 and $4.20
With several major exponential moving averages converging around the $3.48–$3.53 zone, the market is positioned at equilibrium—a technical setup that often precedes significant directional movement.
Natural gas price dynamics (Source: TradingView)
If price action manages to decisively clear the $3.60 resistance level, analysts suggest the breakout could open the path toward $3.85, $4.20, and possibly $4.50 in the coming weeks. Conversely, a rejection near the upper trendline could extend the ongoing consolidation, with downside pressure likely pushing prices toward $3.25 or even as low as $2.90, a historically strong demand zone.
Weather dynamics and global flows drive volatility
In the broader market, European natural gas futures eased to €35/MWh, with stable flows from Norway helping calm supply concerns. However, an ongoing heatwave across North Asia is boosting LNG demand, diverting shipments away from Europe and raising the risk of a supply squeeze as the continent builds reserves for winter. The European Union’s gas storage stands at just 62%, below seasonal norms, as LNG redirection and warmer weather drive demand for cooling.
Adding to geopolitical uncertainty, U.S. President Donald Trump issued a 50-day ultimatum to Russia, which temporarily eased fears of immediate disruption but may introduce volatility closer to the deadline. Norway’s scheduled maintenance later in August could coincide with this window, compounding supply-side risks.
As previously noted, natural gas has been trading within a large symmetrical triangle for months, with traders awaiting a confirmed breakout. A decisive move above $3.60, ideally supported by rising volume and a bullish candle close, would confirm the next leg upward. Until then, the consolidation structure remains in play, and price volatility is likely to increase as external variables converge.
