NatGas Edges Higher as Fundamentals Counter Seasonal Headwinds

Last week, Natural Gas Futures are trading $3.027, up $0.110 or +3.77%.

Weekly Natural Gas

Natural gas futures closed on the strong side of a pivot at $3.538, giving it some upside strength into Monday’s opening. If the momentum continues to increase then prices can continue to climb into the minor pivot at $4.062.

If $3.538 fails as support then prices could retreat back to the 52-week moving average $3.108. This indicator is controlling the longer-term direction on the weekly chart.

Are Storage Trends Really Bearish, or Already Priced In?

The latest EIA report showed a 107 Bcf injection for the week ending April 25—well above the five-year average of 58 Bcf and near the high end of analyst estimates. Normally, such a build would weigh on prices. However, because it came in just under expectations and followed mild weather patterns, much of the bearish weight was already priced in. Importantly, regional inventories remain materially below last year, particularly in the East and Midwest, down 21.7% and 24.4%, respectively. This tightening in key demand hubs adds risk heading into the higher-consumption months.

Will Weak Weather Demand Limit Further Upside?

From May 1–7, national demand is expected to stay soft, with most of the country seeing mild spring weather in the 60s–80s. Cooling demand will be localized to the South, where some 90s are forecast, while cooler systems across the Plains and Midwest may briefly lift heating needs. But overall, the lack of extreme temperatures continues to cap residential and commercial gas burn, keeping a lid on broader demand-side support.

Is Structural Demand Offsetting Weather Headwinds?

Export demand continues to provide a solid floor. LNG feedgas flows climbed 1.5% week-over-week to 15.8 Bcf/d, supported by steady European and Asian interest. U.S. electricity output rose 2.1% year-over-year, showing signs that power sector demand may compensate for weaker residential usage. Meanwhile, dry gas production remains high at 105.6 Bcf/d, but rig count data—up only slightly to 101—suggests that producers are maintaining discipline rather than chasing short-term price strength.

Could U.S.-Canada Trade Tensions Introduce Supply Volatility?

Traders are also watching developments on the trade front. A proposed 10% U.S. tariff on Canadian gas imports threatens to disrupt cross-border flows, especially into the Northeast U.S., where Canadian supply plays a key balancing role. Canada’s prime minister has warned of reciprocal tariffs, escalating uncertainty. While the measures are not yet in place, the potential for disrupted flows during peak demand periods adds a bullish risk factor to an otherwise well-supplied market.

Market Forecast: Fundamentally Bullish but Weather-Limited

Despite soft short-term demand, the market outlook leans modestly bullish on the back of export strength, regional storage tightness, and geopolitical supply risks. The large storage build did little to shake sentiment, as traders focused on forward-looking fundamentals. Weather remains the key drag, and unless patterns shift, price gains may be incremental rather than aggressive in the near term.