Are Buyers Stepping In or Just Feeding the Bear?
Monday’s modest recovery lacks conviction. Resistance sits overhead at the 200-day moving average near $4.48, with heavier pressure at the 50-day around $4.71. Bottom-pickers are active, but this looks more like averaging down than a real shift in sentiment. The problem? There’s still too much weak length in the market. Until that clears, rallies may just offer better entry points for sellers.
What’s Pressuring Prices? Record Output and No Real Winter
The fundamental picture remains heavy. U.S. dry gas output has surged to a record 109.7 Bcf/d in December, while storage levels sit 1.3% above the five-year average. Demand, meanwhile, is light. Forecasts show one of the warmest late-Decembers in decades — a bearish combo that continues to sideline bulls. Futures are technically oversold, but that hasn’t stopped the bleed.
Why Regional Prices Are Telling a Bigger Story
Disparities across U.S. gas hubs are widening. The Henry Hub is holding up near futures pricing, but the Waha Hub in Texas has repeatedly printed negative prices due to pipeline congestion. That’s not just a local problem — it signals deep structural oversupply. On the other side of the map, New England prices are elevated, underscoring how infrastructure gaps continue to distort regional flows.
Is LNG Still a Bullish Card? Not with Global Prices This Low
Even with solid LNG export volumes, it’s not moving the needle. Dutch TTF is sitting at a 19-month low, and Asia’s JKM is stuck near $11/MMBtu — not exactly bullish benchmarks. That global softness takes the bite out of U.S. export strength. Bottom line: without help from overseas demand or a domestic supply cut, LNG isn’t the lifeline bulls are hoping for.
Short-Term Outlook: Still Bearish Until the Weak Hands Are Washed Out
Price is trying to base near the $4.00 handle, but there’s no real bullish catalyst yet. Without a sharp cold snap or production slowdown, the path of least resistance remains lower. Capitulation — not just consolidation — may be what’s needed to reset positioning. Until then, any bounce is suspect.
More Information in our Economic Calendar.
