Updated weekend models showed an increase in cooling degree days (CDDs), particularly across the eastern half of the U.S. through late June. A dominant high-pressure ridge is forecast to deliver widespread highs in the upper 80s and 90s, lifting local demand to high levels despite national demand holding moderate.
While the southern two-thirds of the U.S. remain warm, Texas—typically a heavy gas-burner for power—could be warmer for a more impressive demand setup. Still, this pattern supports higher consumption and could keep pressure on supply balances heading into July.
Crude Oil Rally Risks Boosting Associated Gas Supply
On the supply side, WTI crude futures have climbed above $70/bbl in the wake of geopolitical tensions between Iran and Israel. If this rally sustains, it could pull rigs back into the Permian Basin, reviving growth in associated gas production. This remains a bearish overhang for natural gas markets, particularly if prices stay firm and incentivize further upstream activity.
Will Storage Data Cap the Upside?
Traders are watching this week’s EIA report closely, with NGI projecting a 91 Bcf injection for the week ending June 13. That would be significantly above both last year’s and the five-year average build of 72 Bcf. A larger-than-expected build could temper near-term bullish momentum, especially if technical resistance holds.
Market Forecast: Bullish Bias with Breakout Potential
Natural gas futures are leaning bullish with price action holding above key moving averages and hot weather bolstering near-term demand. But bulls must clear $3.76 and $3.84 to confirm a breakout. Until then, resistance at these levels remains firm. Traders should watch for price action around these technical barriers and Thursday’s storage data for directional cues.
More Information in our Economic Calendar.