Natural Gas: A Potential Price Reversal in the Fall?

Natural Gas Futures Brace for Volatility as Key Levels Approach

New York, NY – Natural gas futures are navigating a choppy market as they approach critical technical levels, with analysts pointing to potential downside pressure in the short to medium term. The commodity is showing signs of weakness, with expectations of a test of the March lows around $1.476 by October 2025.

Key Technical Indicators Signal Caution:

Looking at the monthly chart,natural gas has struggled to break through the notable resistance at $4.212. Following a period of market uncertainty, marked by political pronouncements and trade disputes in early 2025, the formation of a bearish hammer candlestick last month, confirmed by a bearish candle this month, suggests a potential bearish trend for the next two to three months.

On the weekly chart,natural gas futures are failing to sustain their position above the 200-day moving average (DMA) at $3.881. Despite a brief rally in March 2025 that reached $4.900, the trend appears downward. The shorter-term moving averages (9, 20, 50, and 100 DMA) are all trading below the 200 DMA, and a breakdown below the 50 DMA indicates a likely test of the next support level at the 100 DMA, currently around $2.875.

The daily chart paints a similar picture of weakness, with natural gas trading below the 9 DMA at $3.114. Bearish crossovers between the 9 and 20 DMA, both of which have breached the 50 DMA, suggest that the current decline could extend towards the next significant support at $2.864,where a potential rebound might occur.

Evergreen Insights for Natural Gas Investors:

While specific price targets and timeframes are subject to market dynamics, understanding the underlying forces influencing natural gas prices provides a valuable evergreen perspective. Factors such as:

Inventories: As highlighted, above-average inventories can exert downward pressure on prices by indicating an oversupplied market. Monitoring inventory levels, particularly during periods of expected demand fluctuations, remains crucial for any natural gas trader. LNG Demand: The global demand for Liquefied Natural Gas (LNG) is a significant long-term driver for the natural gas market. Investment levels in infrastructure designed to meet this rising demand play a critical role in price discovery. A disconnect between investment and actual demand can create price volatility. Geopolitical Events: As seen with the hypothetical national energy emergency and trade tariff tussles mentioned, geopolitical events can have a swift and ample impact on energy markets, including natural gas. Staying informed about global political and economic developments is essential.
Seasonal Demand: Natural gas demand typically experiences seasonal variations, with higher demand in colder months for heating. Understanding these cyclical patterns is essential for anticipating price movements. The article suggests an expected rise in demand in the first half of 2026, which could influence prices after the current bearish outlook.
* Moving Averages and Candlestick Patterns: The technical analysis presented utilizes common charting tools like moving averages and candlestick patterns. These indicators, while not predictive, offer insights into market sentiment and potential turning points. traders often use these tools to identify support and resistance levels, and also potential trend continuations or reversals.

Disclaimer: All trading decisions involve risk. This analysis is based on technical observations and market commentary. Investors are advised to conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.

What impact could a colder-than-normal September and October have on natural gas storage levels and subsequent prices?

Current Market Dynamics & Natural Gas Prices

Natural gas prices have experienced meaningful volatility in recent years. After peaking in 2022 due to geopolitical factors and increased demand, prices have cooled considerably. as of early August 2025,the Henry Hub natural gas spot price is hovering around $2.70/MMBtu – a stark contrast to the $9+ levels seen previously. This decline is primarily driven by robust storage levels and relatively mild weather patterns. Understanding these natural gas market trends is crucial for anticipating potential shifts.

Key Factors Suggesting a Potential Fall Reversal

Several indicators point towards a possible price reversal in natural gas as we head into the fall season. These aren’t guarantees, but warrant close attention for natural gas trading strategies and investment decisions.

Inventory Levels: While currently high, the rate of injections into storage is slowing. A colder-than-normal September and October could significantly reduce the surplus. The Energy Facts Governance (EIA) reports weekly storage data – a critical resource for monitoring this.

Weather forecasts: Long-range weather forecasts are increasingly predicting a perhaps colder winter for key consuming regions in the US. This would translate to increased heating demand, driving up natural gas demand forecasts.

LNG Export Demand: liquefied Natural Gas (LNG) exports have been a major demand driver. While currently stable, any disruptions to global supply chains or increased demand from Europe or Asia could boost US LNG exports, tightening domestic supply.

Hurricane Season: The Atlantic hurricane season,running through november,poses a risk to Gulf of Mexico natural gas production. A direct hit on production platforms could temporarily disrupt supply, leading to price spikes.

Production Levels: US natural gas production has remained relatively high, but drilling activity has slowed in recent months.This could lead to slower production growth in the coming months, potentially impacting supply. Natural gas production data is key to monitoring this.

Analyzing Historical Price Patterns

looking back at historical data, natural gas prices have often experienced a seasonal pattern. Prices tend to bottom out in the spring and summer, then rise in the fall and winter as heating demand increases. However, this pattern isn’t always consistent, and external factors can significantly influence price movements. Examining historical natural gas prices provides valuable context.

2021-2022 Example: The winter of 2021-2022 saw a significant price surge due to a combination of cold weather, low storage levels, and strong export demand.

2023-2024 Example: The winter of 2023-2024 was milder, resulting in lower demand and relatively stable prices.

The Role of geopolitical Events

Geopolitical events continue to play a significant role in the global energy market.The ongoing conflict in Ukraine, such as, has disrupted natural gas supplies to Europe, increasing demand for LNG from other sources, including the US.Any escalation of geopolitical tensions could further impact natural gas geopolitics and price volatility.

Impact on Related Energy Markets

A potential reversal in natural gas prices would have ripple effects across other energy markets.

Power Generation: Natural gas is a major fuel source for electricity generation. higher natural gas prices would translate to higher electricity prices.

Heating Oil & Propane: Increased demand for natural gas can also impact the prices of alternative heating fuels like heating oil and propane.

Renewable Energy: Higher natural gas prices can make renewable energy sources more competitive.

Practical Tips for Monitoring the Market

Staying informed is crucial for navigating the volatile natural gas market. Here are some practical tips:

1. Follow EIA Reports: The EIA provides weekly natural gas storage reports, monthly production data, and long-term forecasts. (https://www.eia.gov/naturalgas/)
2. **Monitor