Natural Gas Jumps 3% on Warmer Forecast Revisions

July natural gas futures settled at $3.234 per million British thermal units Wednesday, up $0.094 or 2.99%. The move erased Tuesday's $0.007 decline and came after overnight weather model runs shifted warmer for the June 14–18 window. Professionals trade those model changes before the rest of the market sees them. Short sellers ran for cover as fresh longs piled in behind them.

Tuesday's selling had been driven by cooler revisions for the Midwest and eastern United States covering mid-June. James Hyerczyk, a technical analyst at FX Empire, said Wednesday's bounce indicates those cooler revisions lost credibility overnight. Either the models pulled back the cooler air, or confidence in the forecast dropped enough to bring buyers in.

A hot ridge is building across the southern, central, and eastern U.S. right now. Highs in the 80s and 90s. The Southwest is pushing 100s. Chicago and the Ohio Valley could touch the 90s by mid-week. That kind of heat drives air conditioning load hard across the biggest population centers. None of that is new. The market already owned this week's heat. What spooked sellers Tuesday was the cooler air sitting behind it in the June 14–18 window. Wednesday's reversal says that cooler air is losing its grip on the trade.

The supply side offers a counterweight. Lower-48 dry gas production hit 110.1 billion cubic feet per day Tuesday, up 2.2% year-over-year. The Energy Information Administration raised its 2026 forecast to 111.0 bcf per day, up from the May estimate of 110.6. Every revision goes higher. Baker Hughes reported one rig came off the count last week. Active natural gas rigs fell to 124 for the week ending June 5, down from 134 in late February but still well above the 94-rig low from September 2024. Hyerczyk said one rig change does little when production is at this level. Hot weather can spark a rally. Output this heavy caps the follow-through.

LNG feedgas demand is working in the bulls' favor. Estimated net flows to U.S. export terminals hit 17.9 bcf per day Tuesday, up 8.7% from the prior week. Every cargo that leaves on a tanker removes supply from the domestic market. The global picture adds to it. The Strait of Hormuz remains closed for the foreseeable future. Middle Eastern natural gas exports are choked off. Qatar's Ras Laffan Industrial City, which handles roughly 20% of global LNG supply, is still damaged. Repairs could take three to five years. U.S. exporters are filling the gap. That demand floor is structural. It is not going away on one cool forecast revision. The crude oil forecast notes that Middle Eastern supply disruptions are keeping global energy markets tight.

Storage data supports the bull case. The 95 bcf build for the week ended May 29 came in below expectations. The Street had 99. The five-year average was 101. That is the second straight report below the seasonal norm. Total inventories sit 5.7% above the five-year seasonal average, down 0.8% from a year ago. The cushion is real. It is not growing as fast as it should be. If hot weather drives stronger power burn through June, future builds could come in light again.

Technically, Wednesday's bounce found support at $3.072, the lowest price since May 28. The market had crossed below its 50-day moving average at $3.119, then reversed. Hyerczyk said the way it rebounded suggests the market may have found value. The 50-day moving average at $3.120 sets the tone, he said. Above $3.387, a swing top at $3.396 becomes the next target. Below $3.072, the next supports are $2.978 and $2.951. He noted that traders remember the January arctic blast that destroyed the short side in a nearly 100% short market. Nobody wants to be caught short in an oversold market when the weather can flip overnight.

Hyerczyk said Thursday's follow-through is the only factor that matters for the near-term direction. On the proprietary side, AlphaScala's alpha scores rate Cheniere Energy at 66/100 (Moderate) and Baker Hughes at 45/100 (Mixed), reflecting the divergent supply and demand dynamics these companies face.