Futures on US Henru Hub natural gas (NATGAS) are up more than 3% today, testing $3.60 level. The main goal for natural gas buyers is now recent, local high at $3.73 zone.
- U.S. natural gas storage saw a 107 Bcf injection last week, nearly double the five-year average, yet slightly below top-end forecasts. Despite this, regional storage deficits persist, notably in the East and Midwest, with year-over-year shortfalls of 21.7% and 24.4%, respectively.
- Mild spring temperatures are expected to dominate U.S. weather patterns from May 1–7, with most regions seeing highs between 60°F and 80°F. Cooling demand will be limited to the Southern tier, where some 90s are forecast, while minor heating demand may emerge in parts of the Midwest. This lack of extreme conditions keeps residential and commercial gas use subdued, limiting upward price momentum in the short term.
- On the demand side, LNG feed gas flows have increased by 1.5% week-over-week to 15.8 Bcf/d, supported by steady international interest. U.S. electricity generation is also up 2.1% year-over-year, adding to power sector demand.
- Meanwhile, dry gas production remains elevated at 105.6 Bcf/d, but rig counts have only ticked up slightly, reflecting a cautious approach by producers.
- Geopolitical factors add complexity, with proposed U.S. tariffs on Canadian gas imports introducing fresh supply-side uncertainty, particularly for the Northeast.
NATGAS Chart (H1)
Technically, we can see that falling to $3.40 has ended in V-shape rebound. However, now buyers have to show strength pulling prices higher above 61.8 and 71.6 Fibo levels of the last downward wave. As long as prices are below those technical resistance zones, testing $3.73 may be hard, especially with not clearly catalyst from weather patterns, lifting the heating demand. However, during May weather patterns are constantly changing and US - Canadian tariff war may bring a rebound, especially if supported by changes in weather forecasts for the key US heating regions.
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Source: xStation5
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