Natural Gas Falls 2.4% as Storage Surplus, Freeport Outage Weigh

Texas is expected to see triple-digit temperatures later this week, supporting gas-fired power in that region. The heat is not spreading across the higher-population Midwest and East. Forecasts there have turned cooler through July 26, limiting the national demand boost. Canadian wildfire smoke has cleared in parts of the Northeast, improving solar output and reducing gas consumption.

The August contract found support near $2.857 to $2.801, a zone that includes last week's low at $2.823. Resistance stands at a swing top of $2.968. Above that, the 50-day moving average at $3.158 is a key resistance, with the 50% retracement levels near $3.09 and $3.12 above it. The trend remains bearish and any rally is likely to attract fresh selling, traders said.

Thursday's EIA report is the next scheduled test. A build in line with recent injections would reinforce the bearish storage picture. A smaller build after the Texas heat could get shorts' attention. One number would not reverse the surplus by itself, traders said.

The Strait of Hormuz risk remains a wildcard. Any escalation disrupting Middle East LNG flows could push European buyers back toward U.S. cargoes, tightening the domestic balance. Until that materializes, the market is treating the overseas story as a tomorrow problem, traders said.

The August contract has not generated enough momentum to challenge resistance at $2.968. The support zone near $2.857 to $2.801 will determine whether the market builds a base or drops further, with Thursday's injection data the next potential catalyst.