U.S. Natural Gas Futures Surge Above $3/MMBtu Amid Strong Demand Expectations and Broader Market Support

US natural gas futures have risen above $3/MMBtu, reaching a three-week high after five consecutive sessions of gains. The recovery is driven by increased short-term demand and positive signals from the broader energy market.

U.S. natural gas futures have climbed above $3/MMBtu, reaching a three-week high after five consecutive sessions of gains. The recovery reflects firmer short-term demand expectations and supportive signals from broader energy markets. However, the durability of this rebound remains in question, with structural headwinds from record output and elevated storage levels looming large [1].

Natural gas (NG1:COM) has staged its longest winning streak since February, rebounding from a late-August trough near $2.50. The daily chart shows prices challenging resistance in the $3.00–$3.10 zone, where the 50-day EMA at $3.09 converges with prior breakdown levels. A sustained close above this cluster would strengthen the bullish case, opening the path to $3.25–$3.30 and potentially $3.50 [1].

Support rests at $2.90–$2.92, followed by $2.60 and the $2.50 base. The RSI at 50 indicates neutral momentum, consistent with a recovery phase but not yet a confirmed trend shift. Traders remain cautious that any slip back below $2.90 could reintroduce downside pressure [1].

Fundamentals highlight supply ceiling Despite the rally, fundamentals continue to anchor expectations. U.S. production remains at historically high levels, keeping storage 5% above seasonal norms. This surplus has limited price upside, acting as a cushion against spikes in demand. The near-term lift has come from slightly lower output in early September and a temporary uptick in domestic demand. However, LNG feedgas demand has eased, muting the bullish case. With forecasts pointing to milder weather next week, consumption could soften again, testing the staying power of the rebound [1].

Global context Globally, the contrast is sharp. European natural gas benchmarks have slipped to €31.6/MWh, near the 15-month low of €30.3 touched in August. Storage across the bloc is already more than 77% full, keeping the EU on track to hit its 80% target well ahead of November. Record U.S. LNG exports in August have further bolstered Europe’s position, even as policymakers pursue longer-term efforts to phase out Russian gas imports by 2027 [1].

Natural gas faces a pivotal test at the $3.00–$3.10 resistance band. A breakout could drive further gains toward $3.25–$3.50, while failure here risks confirming the broader bearish structure and sending prices back toward $2.60–$2.50. With weather models pointing to softer demand, the rally looks more like a reprieve than a structural turnaround. As we noted in previous discussions, the $2.50 base remains the critical line for longer-term stability. Holding that zone keeps the door open for recovery phases like the current one, but sustained upside will require production cuts or stronger demand to rebalance the oversupplied market [1].

Kinder Morgan, a major player in the natural gas infrastructure sector, presented an optimistic outlook at the Barclays 39th Annual CEO Energy-Power Conference 2025. CEO Kim Dang highlighted the company's robust demand forecast for natural gas, projecting growth of 28 billion cubic feet (Bcf) per day by 2030, surpassing WoodMac’s 22 Bcf forecast. The company plans to invest $7 billion to $11 billion in new projects, emphasizing LNG and power demand [2].

References:
[1] https://seekingalpha.com/article/4819262-us-natural-gas-climbs-above-3-as-rally-tests-supply-headwinds
[2] https://www.investing.com/news/transcripts/kinder-morgan-at-barclays-conference-natural-gas-demand-drives-growth-93CH-4222178