Natural Gas Price Battles $3.70 Floor: Will NG=F Explode Above $4.00 As LNG Supply Tightens?

Natural Gas Ng=F Fights To Hold $3.70 Amid Mixed Supply And Demand Signals

Natural gas prices are currently clinging to key support levels as traders weigh conflicting signals across the global market. NG=F is holding near $3.75 after a volatile week driven by maintenance-related supply curbs, unpredictable weather patterns, and shifting European storage dynamics. On Monday, futures traded at $3.754, sustaining the recovery from recent tests of the $3.70 floor. The $3.70 zone remains critical, with the 50 EMA at $3.704 and 200 EMA at $3.696 now acting as a short-term technical base. Bulls defended this level aggressively last week, and as of today, higher lows continue to reinforce the bullish bias despite temporary pullbacks.

European Gas Storage Pressures Build As LNG Imports Face Competition

European natural gas markets are sending mixed signals. The Dutch TTF benchmark slipped 1.2% to close at €35.81 per MWh but remains up 2% on the week, reflecting underlying storage concerns. Inventories across the EU have now surpassed 50% full, according to Gas Infrastructure Europe, though they lag behind 2024 and the five-year average. ING notes that Europe faces an uphill battle to reach seasonal targets, particularly as competition for LNG flows with Asia intensifies during the summer. This dynamic is crucial, as reduced LNG inflows could force Europe to tap existing storage harder during peak demand periods. The interplay between European storage strategy and Asian spot prices will remain a key driver for NG=F in coming months.

Planned Maintenance Curtails Global Natural Gas Flows, Providing Near-Term Support

Seasonal maintenance is constraining supply across major production hubs. U.S. LNG terminals and Norwegian offshore facilities are both undergoing planned outages this month, temporarily reducing export capacity. The TTF contract dipped by 2% to $11.91/MMBtu on Monday after gaining 3% last week but remains poised to rebound as maintenance tightens the market. In North America, feedgas deliveries to LNG export plants have softened, contributing to tighter domestic balances. Norwegian gas exports have also been limited, offering some cushion to European storage while simultaneously raising European spot prices last week. Traders expect this supply pinch to offer short-term support for NG=F unless offset by weakening demand.

Natural Gas Demand Outlook Hinges On Weather And Power Sector Activity

Weather remains a critical wildcard for NG=F. With North America experiencing mild conditions—neither hot nor cold—residential and commercial demand is muted. However, the prospect of increased power sector demand is emerging as a potential offset. If summer heatwaves materialize, electrical demand for gas-fired generation could spike, supporting prices through July. For now, the market is trading cautiously, with the $3.85 resistance level acting as a ceiling. A breakout above $3.85 would target the $4.00 region, where substantial supply awaits. Conversely, failure to hold $3.70 would expose the $3.63 area, where Friday’s lows sit. Below that, the $3.618 and $3.661 zones could be tested.

Technical Structure Points To Short-Term Strength With Caution Beyond

Technically, NG=F remains constructive in the short term. The ascending trendline from late May remains intact, and the recent defense of $3.70 has reinforced bullish positioning. Buyers briefly pushed toward $3.812 last week but encountered resistance. Consolidation between $3.70 and $3.812 is now dominating short-term charts, with momentum indicators tilting slightly positive. Should bulls reclaim $3.812, targets at $3.854 and $3.894 would come into view. However, traders remain wary of the seasonality factor. Historically, summer months cap upside in natural gas unless exceptional heat drives power demand higher than forecast.

Geopolitical Factors Add Volatility Premium To Natural Gas Markets

Geopolitical tensions are adding a premium to energy prices broadly. Fresh conflicts in Eastern Europe and the risk of sanctions on key energy exporters are being priced into both oil and gas markets. While WTI crude held firm near $64.50 and Brent at $66.22, NG=F traders are also factoring in potential disruptions. Should any pipeline or LNG terminal face unexpected outages due to geopolitical events, NG=F could see rapid repricing. Conversely, any easing of tensions would likely pressure prices back toward $3.60 or lower, particularly if mild weather persists.

U.S. Jobs Data And Trade Optimism Offer Macro Support For Energy Complex

Broader macro factors are also influencing NG=F sentiment. Last week’s stronger-than-expected U.S. jobs report bolstered confidence in energy demand, while renewed optimism around global trade talks lifted risk appetite across commodity markets. For NG=F, this has translated into firm support above $3.70 despite a challenging seasonal backdrop. Still, macro sentiment alone is unlikely to sustain a major rally without a corresponding pickup in physical demand or a structural tightening of supply.

Asian LNG Demand Could Tighten Summer Balances Further

Asian LNG buyers are stepping up activity, adding further complexity to the global natural gas outlook. Japan, Korea, and Taiwan have increased tenders for spot cargoes ahead of anticipated summer demand, while China’s appetite remains steady. If Asian spot prices rally, more Atlantic basin LNG could be diverted eastward, tightening U.S. and European markets. This would offer further upside potential for NG=F, particularly if European storage builds falter in coming weeks. Close monitoring of Asian buying patterns will be critical for gauging NG=F price risk into July.

Bullish And Bearish Scenarios: What Comes Next For Natural Gas Ng=F?

The current landscape presents both bullish and bearish pathways for NG=F. On the bullish side, persistent maintenance, geopolitical risks, and a potential heat-driven power demand surge could propel prices above $3.85, opening the door to $4.00+ in July. Technically, the market remains biased to the upside as long as $3.70 holds. On the bearish side, mild weather, strong European storage progress, and limited U.S. LNG export capacity due to maintenance could trigger a break below $3.70, exposing $3.63 and possibly $3.61. In this context, traders should maintain flexibility. Near term, the bias leans bullish with a clear caveat: unless demand accelerates materially, rallies toward $4.00 may prove short-lived.

That's TradingNEWS