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Can the 50-Day Moving Average Hold?
The 50-day moving average has been a reliable floor for natural gas prices in recent months. However, with futures now trading lower for the week and testing this level, the market is at a critical juncture. A breakdown could open the door to a test of the March 3 low at $3.742, and below that, the pivot support at $3.350 comes into play. Immediate resistance is sitting at $3.924, but the technical tone has turned soft, and bulls are losing grip.
Speculators Cut Longs, Eroding Bullish Support
CFTC data for the week ending March 18 revealed that professional speculators slashed net long positions by 34,000 contracts. This move reflects a pullback from the bullish positioning that previously helped drive front-month prices toward $5/MMBtu. According to EBW Analytics, the drawdown included 39,000 long contracts versus just 5,000 short closures, suggesting a meaningful retreat in speculative confidence. The trend has been consistent over the past two weeks, with 58,000 long positions liquidated—pressuring prices further.
Warm Weather Outlook Cools Demand Expectations
Weather forecasts through March 30 indicate light natural gas demand. Temperatures across the northern U.S. will range from the 30s to 60s, while the southern tier will see milder highs in the 50s to 80s. The combination of a warmer-than-average March and an early injection season start is reinforcing the soft demand environment and weighing on fundamentals.
Short-Term Outlook: Bearish Bias Building
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