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Tecchnically, the weekly trend is up with the market trading on the strong side of the 52-week moving average at $2.910. However, short-term momentum is down.
Trader reaction to the pivot at $3.361 is likely to determine the direction of the market this week. If the downside momenum persists then look for traders to push natural gas into the support area formed by the former bottom at $2.957 and the 52-week moving average.
Look for buyers on the first test of the $2.957 to $2.910 support zone. But keep in mind there is plenty of room to the downside if it fails to hold.
Is Mild Spring Weather Eroding Demand?
Warmer-than-normal conditions across much of the U.S. are keeping both heating and cooling needs subdued. Forecasts show continued warmth across key demand centers through late April, particularly in the East, South, and Midwest. This seasonal lull is limiting residential and commercial consumption, with only short-lived cold snaps offering limited upside. Without a meaningful rise in weather-driven demand, traders are anticipating stronger storage injections ahead.
Bullish Storage Miss Fails to Shift Sentiment
The EIA reported a 16 Bcf injection for the week ending April 11 — well below the expected 24 Bcf and the five-year average of 50 Bcf. While inventories remain tight at 20.9% below last year and 3.9% below the five-year average, the smaller build failed to spark a rally. The market remains focused on forward-looking fundamentals, where increasingly mild temperatures suggest storage builds could accelerate in the coming weeks.
Supply Still Outpacing Demand Growth
Production remains elevated, with dry gas output in the Lower 48 holding above 105 Bcf/day — up more than 5% from last year. LNG export volumes have declined to 15.5 Bcf/day, softening the export demand side of the equation. While domestic consumption has increased 2.2% year-over-year, the supply-demand imbalance continues to favor the downside. Electricity generation offers limited support, with a 6.4% year-over-year increase in output, but not enough to reverse the broader surplus.
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