Natural Gas Prices Stall Near $3.50 as Seasonal Demand Ebbs
After rallying sharply in March on colder-than-expected weather and supply outages, Natural Gas (NG=F) has found itself pinned beneath the crucial $3.50 per MMBtu threshold during early Friday trade. This resistance aligns with the 50-day exponential moving average, itself a barrier since mid-April, and coincides with the up-trend line from February’s lows—both of which have repeatedly capped upside attempts. Traders who chased the late-season bounce from $2.95 now hesitate as the market struggles to absorb lingering oversupply and the inevitable drop in residential heating demand.
US Storage Reaches Five-Year Highs, Pressuring Prices
Weekly data from the Energy Information Administration showed a record injection of 107 billion cubic feet into storage for the week ending April 25, lifting total inventories to 2.06 trillion cubic feet—12% above the five-year average and the highest level since 2018. Milder spring temperatures drove demand for heating and cooling down to just 57 bcf/day, 15% below the ten-year seasonal norm, while production held near 104 bcf/day, within 1 bcf/day of its all-time peak. With refill season now underway, the pace of injections is on track to flirt with May’s 2015 record build of 494 bcf, raising the specter of bloated carryover stocks into the summer and weighing on Natural Gas (NG=F) benchmarks.
European TTF Benchmark Climbs on Trade Optimism
Across the Atlantic, Dutch TTF futures leapt 2.2% to €32.85/MWh ($37.25/MWh) as China signaled willingness to evaluate US tariff discussions, stoking hopes for a broader thaw in global commodity demand. Europe enters the summer with storages at only 68% capacity after a cold winter forced withdrawals that left inventories at a three-year low. Buyers are now scrambling to refill ahead of potential heat waves, and LNG cargo diversions to Asia remain a threat, with spot charter rates surging 25% in the last fortnight. TTF’s backwardated curve—summer prices 5% below winter—reflects urgent restocking needs and the premium attached to winter security, underpinning near-term European Natural Gas valuations.
Türkiye’s Spot Market Shows Cooling Volumes
In Turkey, where spot trading is governed by Energy Exchange Istanbul, Thursday’s natural gas volume slipped 14.5% week-on-week to 18.6 million TRY ($0.48 million), with prices at 12,951 TRY per 1,000 m³. Pipeline inflows held steady at 142.8 million m³, yet declining spot turnover highlights weaker industrial uptake and growing reliance on pipeline supply agreements. As Turkey heads into its off-peak season, market participants will watch for changes in delivery patterns that could signal broader demand softness across the Mediterranean region.
NYMEX Prices Poised for Breakdown Toward $3.25
On the technical front, a failure to topple $3.50 has shifted the focus to support at the 200-day EMA near $3.25. A daily close below that level would open a path toward $3.00, a round figure that has historically drawn dip buyers. Conversely, a convincing move above $3.60—where the April high and 100-day SMA converge—could draw fresh momentum traders back into longs, targeting $3.75. The Relative Strength Index sits at a neutral 52, neither oversold nor overbought, suggesting the next directional thrust will depend on fresh catalysts: either a weather-driven demand surprise or another production setback in Appalachia or the Gulf of Mexico.
Positioning for Summer’s Demand Shift
As injection season progresses, risk-reward favors short positions on rallies into the $3.50–$3.60 zone, given the high likelihood of record storage builds. That said, traders should remain alert to sudden heat waves in the US South or tropical storm threats to Gulf infrastructure, both of which could reverse the narrative and send NG=F spiking back above $4.00. On balance, the prevailing oversupply environment and subdued power-generation burn argue for a cautious bearish lean, with tight risk controls around key technical pivots.
