Gas prices poised for 2025 lows as critical support at $3 nears breakdown

Natural gas prices in the US have continued their downward trajectory this week, slipping below the key 200-day moving average with minimal buyer resistance. The market is now approaching the $3 support level, which has consistently capped declines since December 2024. However, the formed downtrend channel suggests more potential losses toward $2.75 if this support fails to hold.

The recent 15% three-day plunge may trigger a technical rebound, though any recovery will likely remain contained within the $3.20–$3.30 range. With the RSI indicator still being above oversold territory, sellers maintain control and may continue profiting from short positions.

Seasonal patterns also reinforce the bearish outlook. Last year's price bottom was seen on August 5, before heating demand emerged. This suggests that the current downtrend could persist for another two weeks, until the risks of a reversal outweigh the potential gains for going short.

In addition, fundamentals support the downward pressure. US gas inventories are 6% above seasonal norms, and production is on track to reach a record 107.3 billion cubic feet per day by the end of the month. Sustained heat waves and the onset of hurricane season appear unlikely to shift consumer sentiment, as weather disruptions typically affect power demand more than production.

The market is likely to experience a lull until quotes reach the $3 level. This will provide a great chance to strike a deal, counting on prices dropping to $2.75.

The following trading strategy is recommended:

Sell gas above the $3 level. Take Profit — $2.75. Stop Loss — $3.5.