U.S. natural gas futures (NG=F) have slipped to their weakest levels in nine months, weighed down by surging supply, mild weather forecasts, and a bearish shift in demand expectations. September contracts on the New York Mercantile Exchange recently traded at $2.78 per MMBtu, down 3.7% on the session and testing the critical $2.75–$2.80 band that technicians have flagged as pivotal support. The move reflects a confluence of forces: record Lower 48 production averaging 108.5 bcfd so far in August, a hefty storage overhang of 3,216 bcf (6.3% above the five-year average), and cooling degree day forecasts that continue to ease into late summer.
Production Strength and Supply Overhang
Output in the Lower 48 has been relentless. August’s daily average has surpassed July’s record 107.8 bcfd, ensuring injections into storage remain aggressive even as peak summer demand fades. Imports from Canada, averaging 7.5 bcfd, add further weight to supply. LNG exports, once a consistent release valve for oversupply, have wavered. Daily feedgas flows have bounced between 14.2 bcfd and 15.9 bcfd this month, still shy of April’s 16.0 bcfd record, after disruptions at facilities such as Cheniere’s Sabine Pass (4.5 bcfd capacity), Cameron LNG (2.0 bcfd) and Freeport LNG (2.1 bcfd). The combined effect has been consistent weekly storage builds: the EIA reported a 56 bcf injection for the week ending August 8, well above the five-year norm of 33 bcf, pushing inventories further above trend.
Weather Shifts and Demand Weakness
Weather has turned from a bullish driver into a headwind. Earlier in the summer, extreme heat across the Midwest and South lifted power sector gas burn to over 48 bcfd, but updated models now show national cooling degree days slipping below both the 10-year and 30-year norms. LSEG projects U.S. demand, including exports, will fall from 110 bcfd this week to 105.7 bcfd next week, a marked slowdown just as supply peaks. Gas-fired power generation still accounts for 43% of U.S. electricity, but cooler forecasts in the Northeast and Ohio Valley are curbing incremental consumption. Without the weather premium, speculative longs have unwound positions, leaving natural gas vulnerable to sharper downside moves.
European Benchmarks Mirror U.S. Weakness
Globally, gas markets have tracked the U.S. decline. Dutch TTF prices sank toward €30/MWh, their lowest level of 2025, on the back of high European storage levels — nearly 75% full — and the growing possibility of a peace settlement in Ukraine. Asian benchmarks also retreated, with JKM sliding to $10.93/MMBtu, down more than a dollar from last week. While geopolitical shocks like hurricanes or pipeline disruptions can provide short-term spikes, traders increasingly view storms as demand-negative, knocking out LNG export facilities rather than U.S. Gulf supply. Hurricane Erin, currently tracking near the Bahamas, is expected to skirt the East Coast without landfall, muting any bullish impulse.
Technical Dynamics and Market Psychology
On the charts, NG=F remains capped by resistance near $2.96–$3.00, with moving averages converging in the same zone. Sellers are targeting $2.76, with secondary support near $2.57 if bearish momentum persists. The RSI sits below 50, underscoring weak momentum, and market depth shows increased short positioning as rallies toward $3.00 repeatedly fail. A breakout above $3.20 would be required to shift sentiment toward a more constructive stance, but absent a weather or LNG shock, probabilities lean toward continued range-bound trading with a downside bias. Traders are openly treating moves toward $3.00 as selling opportunities rather than signs of recovery.
Investor Angle and Strategic Assessment
Equities tied to natural gas have echoed the commodity’s volatility. Gulfport Energy (GPOR) fell 0.34%, Antero Resources (AR) slipped 1.03%, while Expand Energy (EXE) held slightly positive. Fundamentals for producers remain resilient, with EXE forecast to post a 370% EPS surge in 2025 and Antero projecting 25% revenue growth. Yet in the immediate term, record supply and heavy storage keep cash margins tight. For traders in natural gas futures, the data favors a bearish near-term stance, with $2.75 the battleground and $2.50 a risk if storage builds continue at above-average pace. Into 2026, however, the picture brightens: the EIA projects Henry Hub averaging $3.60 in H2 2025 and $4.30 in 2026, supported by growing LNG exports and structural demand from electrification and AI-driven data centers.
That’s TradingNEWS