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Prices are now flirting with the 200-day moving average near $2.904, a key long-term indicator that traders often use to gauge broader market direction. A decisive breakdown below this level could open the door to accelerated selling, potentially driving prices toward $2.199. While a short-term technical bounce remains possible on the first test of this support, current price action suggests the path of least resistance remains to the downside.
EIA Storage Data Expected to Pressure Prices
The market is on edge ahead of the U.S. Energy Information Administration’s (EIA) weekly inventory update. Traders are anticipating a +70 Bcf injection for the week ending April 18—well above the five-year average build of +58 Bcf for this time of year. If realized, this would mark a sharp pivot from last week’s bullish print of +16 Bcf, which came in below both forecasts and seasonal norms. A larger-than-expected build could further erode bullish sentiment, especially with prices already under technical pressure.
Fundamentals Show Tight Supply but Momentum Is Slipping
Despite the recent softness, supply conditions remain relatively tight. As of April 11, U.S. natural gas inventories were down 20.9% year-on-year and 3.9% below their five-year seasonal average. However, the market’s current focus is on short-term injection trends rather than lingering tightness. Meanwhile, European storage stands at 37% full—well below its seasonal norm of 48%—suggesting that global demand recovery could become supportive down the line, but not enough to buoy prices in the near term.
Short-Term Outlook: Bearish Bias Until Technical Support Holds
The near-term outlook remains bearish unless natural gas futures can reclaim the 61.8% Fibonacci retracement at $2.995. A rebound above that level could trigger short-covering, but without support from fundamental data or technical strength, any rally risks being short-lived. The focus now shifts to whether the 200-day moving average can act as a reliable floor, or if traders are prepared to push lower toward deeper support.
More Information in our Economic Calendar.
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