Natural Gas Price Forecast: Break Below $3.00 Ignites Fresh Downside
NG=F sinks to four-month lows as 70 bcf build and oversupply pressure technical breakdowns toward key targets at $2.86, $2.63 and beyond | That's TradingNEWS
Supply Growth Outpaces Cooling Demand
Natural Gas (NG=F) has slid 3.4 percent in the past week as U.S. storage rose by 70 billion cubic feet to 2.99 trillion cubic feet, marking a 5 percent surplus versus the five-year average of 2.85 trillion. Production climbed 1.2 percent to 99.6 bcf/d, up from 98.4 bcf/d a week earlier, while power-burn demand dropped 6 percent to 29.4 bcf/d amid milder temperatures across the Midwest and Southeast. Exports via pipeline to Mexico increased 2.8 percent to 6.5 bcf/d, but LNG feedgas fell 4 percent to 12.3 bcf/d as Asian spot prices eased from $11.25/MMBtu to $10.10/MMBtu over the same span. These shifts reflect robust supply against a demand base that has fallen by 9 percent since mid-July, driven by lackluster heating needs and concerns about slowing global growth amid escalating tariff tensions.
Inventory Builds And Seasonal Comparisons
The August 1 report from the U.S. Energy Information Administration showed a 70 bcf injection, contrasting sharply with last year’s 19 bcf build and the five-year average of 49 bcf. This 51 bcf excess over the five-year mean underscores ample working gas ahead of the autumn withdrawal season. Storage in the Producing Region hit 1.21 tcf, up 81 bcf year-on-year, while the East, West, and Mountain regions recorded 0.92 tcf, 0.63 tcf, and 0.23 tcf respectively—each 40–60 bcf above last year’s levels.
Technical Breakdown And Key Levels
Natural Gas plunged under the $2.97 swing low and daily AVWAP at $2.97, reaching an intraday low of $2.09. Breaching that neckline confirms a bearish monthly collapse below the $2.97 four-month low, targeting $2.86 next and the 20-Month MA at $2.85. A falling ABCD pattern projects a $2.63 symmetry pivot and a secondary 78.6 percent retracement at $2.53. On the upside, any daily close above the AVWAP and reclaim above $2.97 would invalidate the breakdown, opening resistance at $3.20, the 200-Day EMA at $3.24, and the 50-Day EMA at $3.31, just ahead of the looming Death Cross.
Momentum Indicators And Chart Structures
The daily RSI sits at 28.3, deeply oversold relative to last October’s trough at 24.7. The MACD histogram has turned negative for the first time since May, with the signal line crossing below the MACD line at –0.12, signaling accelerating downside momentum. On the 4-hour chart, price channels at $2.80–$3.15 continue to confine late rallies, while net inflows per CoinGlass show a $12 million outflow on August 4, reflecting liquidation pressure.
Coterra Energy Earnings And Realized Price Dynamics
Coterra Energy (CTRA) posted Q2 profits of $0.48 per share versus $0.45 consensus, driven by a 17 percent uptick in total production to 783,900 boe/d across the Permian and Anadarko basins. While realized oil prices slid 20.9 percent year-on-year to $62.80 per barrel, natural gas realized prices soared 74.2 percent to $2.20 per Mcf, cushioning cash flows. Coterra’s new seven-year gas supply deal for 50 mmcf/d at the CPV Basin Ranch Energy Center beginning in 2028 underscores rising demand from power generation amid the global shift to cleaner fuel sources.
Eurostat Household And Industrial Price Shifts
Eurostat data show EU household gas prices jumped to €12.33 per 100 kWh in H2 2024, up 11.7 percent from €11.04 in H1, marking the highest since 2008. Sweden led at €18.93, the Netherlands €16.71, and Italy €15.86, while Hungary at €3.20, Croatia €4.60, and Romania €5.40 reported the lowest. In PPS terms, Portugal’s €16.60 tops the bloc versus Hungary’s €4.72 floor. Non-household prices excluding all taxes rose marginally to €5.41 per 100 kWh from €5.30, reflecting easing wholesale costs and stable network charges.
Forecasted Targets And Pattern Projections
Symmetry and pattern analysis underline key objectives: a retest of $2.86 and $2.63 in the near term, while a rebound above $2.97 opens a re-entry toward $3.24 and $3.31. Seasonal storage draws beginning October could flip a 300 bcf withdrawal period into a $3.50 resistance test, followed by $4.00 if injections retrace back toward the five-year mean. Conversely, continued builds could expose $2.50–$2.30 as completion zones for bearish extensions.
Strategic Positioning: Sell On Rallies
Given oversupply, weakening demand metrics, bearish technical breakdown, and modest corporate price realizations, the risk-reward favors tactical short positions on rallies above $2.80, targeting $2.63 and $2.53. A hold scenario emerges only upon a daily close above $3.24, where a reversal toward $3.70 becomes plausible. At current levels near $2.93, liquidity and momentum suggest a Sell recommendation until the AVWAP and trendline are convincingly recaptured.
