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Natural gas is now trading near critical support levels, with immediate resistance seen at $3.361—the 50% retracement level. A move above this could spark short-covering but is unlikely to flip sentiment to bullish. On the downside, traders are eyeing $2.995, the 61.8% retracement, followed by the 200-day moving average at $2.894—a level where new buyers may look to enter if tested. At midday Wednesday, Nymex futures were down 2.1% at $3.258/MMBtu.
Spring Weather Keeps Demand Low
Weather forecasts show overall low to moderate demand for the April 14–20 period, as a mix of warm high pressure and brief cold snaps move across the U.S. The shoulder season continues to limit both heating and cooling needs, encouraging storage builds. This seasonal lull is frontloading bearish risks, according to EBW Analytics, which also noted that speculators flushed out over the past two weeks are now waiting for clearer signals of a bottom before re-entering.
EIA Inventory Data Adds Pressure Despite Tight Supply
Last Thursday’s EIA report showed a +57 Bcf build for the week ending April 4—slightly below expectations but still well above the five-year average build of +17 Bcf. While this points to short-term softness, inventories remain tight year-on-year, down 19.8% compared to last April and 2.1% below the five-year average. European storage is also behind pace at 35% full versus a 46% five-year average, adding some longer-term support potential.
Global LNG Supply Rising as Europe Eyes Storage Flexibility
Global LNG supply is projected to grow by 10 million metric tons this summer, driven by new North American production. Europe is expected to absorb much of this increase as it accelerates storage injections to offset lost pipeline volumes. However, warm weather in Asia and potential trade tariffs could temper global demand. EU officials are reportedly considering looser storage targets to avoid upward price pressure, which could influence summer pricing dynamics.
Market Forecast: Bearish Near-Term Bias
Short-term sentiment remains bearish, with technical weakness aligning with seasonal demand softness and a growing LNG supply picture. While tight inventories offer some underlying support, traders are likely to test lower levels before any sustained recovery.
More Information in our Economic Calendar.
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