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Weak Weather Support Keeps Prices in Check
Natural gas futures saw sharp swings before settling lower on Monday as traders weighed the impact of mild weather and an early start to the injection season. While weekend weather models trended colder for the 8-15 day outlook, the shift was not strong enough to drive a sustained rally. The European model showed more than 10 heating degree days (HDDs) added, signaling colder air in late March, but the U.S. GFS model moved in the opposite direction, trending about 10 HDDs warmer. This divergence leaves uncertainty around future demand.
Near-term temperatures remain bearish for gas prices. High pressure is dominating much of the U.S., keeping temperatures above normal through Wednesday. A brief cold front will sweep across the country Thursday through Saturday, bringing rain, snow, and cooler temperatures. However, overall demand remains light, with only a short-lived uptick expected later this week.
Production Stays Elevated as Early Storage Build Limits Upside
Supply-side conditions are also weighing on prices. U.S. natural gas production has stalled at higher levels, adding to downward pressure as storage concerns ease. Early signs of storage injections suggest that the upcoming refill season may not be as tight as previously expected, reducing fears of supply constraints.
The combination of mild temperatures, strong production, and an early start to storage injections has kept natural gas futures on the defensive. Without a stronger push from colder weather or a supply disruption, traders remain cautious about near-term upside potential.
Market Forecast: Bearish Risks Remain
The technical picture leans bearish, with futures at risk of breaking key support levels. If $3.924 fails to hold, a drop toward $3.713 is likely. A move below this could trigger further selling pressure. On the fundamental side, weather models will be closely watched for any colder revisions, but without a stronger shift, natural gas prices may struggle to find bullish momentum. The near-term outlook remains bearish unless a significant catalyst emerges.
More Information in our Economic Calendar.
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