The market’s failure to reclaim $3.733 on Monday signaled waning buying interest, exposing the June contract to downside risk. Should bearish momentum persist, traders are eyeing a potential retreat toward the minor pivot at $3.438. A break above $3.900 would be needed to confirm renewed upside strength, opening the path to test $4.062 — a key resistance level for bullish extension.
Weather Turns Cooler While Short-Term Demand Softens
Near-term weather patterns have moderated expectations for demand. While parts of the Southwest and Texas will see highs in the 90s to low 100s mid-to-late week, national demand is projected to remain light initially before turning moderate.
NatGasWeather noted a slight cooling trend for the 7–15 day outlook, particularly across the Midwest and Northeast, limiting the potential for a sustained demand bump from heat-driven cooling needs.
Rapid Inventory Builds Reinforce Bearish Pressure
Traders are increasingly concerned about the pace of storage builds. The EIA reported a 104 Bcf injection for the week ending May 2, lifting total working gas in storage to 2,145 Bcf.
This is 30 Bcf above the five-year average and only 1.4% above the same point last year, despite softer market fundamentals. NGI expects a further 114 Bcf build in the next EIA report due May 15, underscoring how subdued demand and rising renewable generation are enabling stronger-than-usual injections.
Production Eases but Still Fails to Offset Soft Fundamentals
While production has pulled back slightly, it has yet to materially alter the oversupply narrative. With seasonal demand still tepid and renewables reducing gas-fired generation needs, the market continues to price in robust end-of-season storage levels — keeping pressure on near-term contracts.
