Natural Gas: Seasonal Factors Could Drive a Reversal Later This Year

After reviewing the movements of the natural gas prices in different time charts, I anticipate that price reversal seems two months away as the current price set-up, reflecting a lingering storage surplus and a milder shift in summer weather which is likely to push the prices to test the bottom in September around $1.972 where the natural gas futures will teeter till the advent of winters for sometime before logging on a reversal path.

Besides shifting weather-generated demand, price reversal depends on the success of Trump’s tariff policies and how he controls the changing energy supply situation by imposing higher tariffs on Asian countries that are buying oil and gas from Russia and other suppliers.

Undoubtedly, Gas inventories built at an above-normal rate for much of the April-June period due to mild spring weather, strong supply, heavy LNG facility maintenance, and weaker-than-year power burns, but now they feel stuck as the natural gas futures are still on a steep slide.

I anticipate that the July storage changes were much closer to seasonal norms while the peak summer heat now almost at the back foot and August forecasts skewing mild, while the reality of entering winger 2025-26 with above average inventories, natural gas futures look ready to test the bottom seen in March this year once again at $1.476 in Oct. 2025, and could teeter between a range from $1.476 to $3.291, before the advent of next reversal in Dec. 2025 as the natural gas demand is expected to rise next year’s first half as the investment levels are still below what the market need to meet rising LNG demand in 2026.

Technical Levels to Watch

In a monthly chart, natural gas futures continued to struggle for find a breakout above the significant resistance at $4.212 after the declaration of national energy emergency by the U.S. President Donald Trump on his joining on Jan. 20, 2025, followed by advent of trade tariff tussles, resulted in the formation of an exhaustive hammer last month, which has got a confirmatory bearish candle this month that might keep the natural gas futures in bearish mode for the next two to three months.

In a weekly chart, natural gas futures continued to attempt to sustain above the 200 DMA at $3.881. Still, they could not sustain despite testing a high in the second week of March, 2025 at $4.900 from a steep slide started as the 9 DMA, 20 DMA, 50 DMA and 100 DMA are trading below the 200 DMA while the natural gas futures have found a breakdown below the 50 DMA and look ready to pierce the next support at 100 DMA at $2.875.

In a daily chart, natural gas futures are trading even below the 9 DMA at $3.114 since the formation of bearish crossovers with the piercing of the 20 DMA by the 9 DMA. In comparison, both of them have already pierced the 50 DMA, indicating the depth of this fall could be up to the next significant support at $2.864, from where a bounce back can be expected.

Disclaimer: Readers are advised to take any position in natural gas futures at their own risk, as this analysis is based only on observations.