In recent weeks, US natural gas (NG) prices have settled firmly below the significant $3 level.
Last week’s headline event was the Energy Information Administration (EIA) report, which showed 54 billion cubic feet being withdrawn from NG inventories instead of the anticipated 35 billion. Such a difference triggered a short-term rally, but the surge was quickly offset by fresh weather forecasts calling for above‑average temperatures across the United States in mid‑April. Therefore, heating demand is expected to go down soon. On the flip side, these conditions could give energy companies an early start on replenishing storage ahead of schedule.
From a technical standpoint, there is a seasonal pattern. April and May typically bring a pronounced bearish trend. These months are known as one of the most easily predictable periods in the NG market. By mid-April, the heating season is effectively over, pushing demand 20%–30% below winter peaks. At the same time, the industry shifts gears to refill underground storage. As a result, a clear domestic supply surplus tends to emerge in the second half of spring, sending prices to test local lows.
The final recommendation:
— Sell natural gas at the current level, with a $2.80 target in the coming month;
— Place Stop Loss at $3.05, just above resistance, to manage risks if the market plays against us.
This content is for informational purposes only and is not intended to be investing advice.
