Natural Gas — Pressure persists, but a rebound setup build

Natural Gas (Nov)— Pressure persists, but a rebound setup build

Natural gas futures extended losses to a 3-week low, weighed down by forecasts for warmer-than-normal U.S. weather through late October. Atmospheric G2 expects above-average temperatures across most of the country between October 20–29, limiting heating demand and capping price recovery attempts.

📉 Fundamentals:
- U.S. (Lower 48) dry gas production: 108.5 bcf/day (+5.8% YoY)
- Demand: 71.3 bcf/day (-4.8% YoY)
- Storage levels: +4.5% above 5-year average, with inventories expected to rise +83 bcf this week (EIA consensus)
Active gas rigs: 120 (+2 w/w)

🔥 Geopolitical Context:
European gas futures climbed ~2% after Russian strikes on Ukraine’s gas infrastructure cut ~60% of national output, forcing shutdowns at DTEK and Naftogaz sites. The disruption raised supply concerns at the start of the heating season, with EU storage now at 83% capacity versus 93.2% last year.

📊 Technical Outlook:
Price is consolidating within the $3.40–$3.53 range, forming a short-term sideways channel. RSI is neutral near 44, and momentum remains weak. A break below $3.40 could trigger a slide toward $3.30, while a close above $3.53 may open the way to $3.60–$3.65.


Scenario Outlook
🔻 Bearish scenario (main):
A confirmed breakdown below $3.40 would expose $3.32–$3.30 as the next target zone.
Momentum indicators support potential continuation lower.
🔺 Bullish scenario (alternative):
If buyers reclaim $3.53, we could see a short-covering rally toward $3.60–$3.65, but resistance above remains heavy due to the 200 SMA ceiling.

Summary
Natural Gas remains range-bound but weak, with sentiment tilted bearish due to macro fundamentals (warm weather + ample storage).
Traders should watch for a decisive break of the $3.40–$3.53 zone to define the next directional move.