US natural gas (NG) prices managed to settle firmly below the critical $2.80 level. However, the outlook for the coming weeks remains pessimistic, promising further declines based on both fundamental and technical factors.
The recent announcement of a two-week ceasefire in the Middle East won’t solve the structural supply shortage in the NG market overnight. Given the scale of the damage, recovery will require time. The breakdown of the Ras Laffan plant in Qatar has taken approximately 17% of global export capacity offline for years to come, sharply widening the spread between US Henry Hub prices and those in European and Asian markets. This has motivated American producers of liquefied natural gas (LNG) to ramp up shipments to record levels. US deliveries reached 17.9 billion cubic feet per day in March.
What’s more remarkable, exceptional exports have not interfered with domestic output. According to the latest Energy Information Administration (EIA) report, NG inventories increased by 36 billion cubic feet last week. The previous data, in contrast, showed an extraction of 54 billion cubic feet. Taken together, these figures suggest that the US gas supply remains steady while demand is moderate—placing little upward pressure on prices.
The technical setup tells the same story, filling in some gaps in the fundamental picture. NG quotes have consolidated below the significant $2.80 mark, paving the way toward the nearest target at $2.65.
The ultimate recommendation is to sell natural gas at current levels, aiming for $2.65 within the next one to two months. To mitigate the risk of adverse market movements, place a Stop Loss order slightly above resistance, or around $2.85.
