September natural gas futures fell 1.4% to $2.743. Rising production and a storage surplus offset a five-day high in LNG feedgas. Europe's storage deficit keeps a floor under prices.
Alpha Score of 42 reflects weak overall profile with weak momentum, poor value, weak quality, weak sentiment.
September natural gas futures fell Tuesday, reversing Monday's bounce, as the lift from higher LNG feedgas failed to clear the overhead from rising production and comfortable storage. Contracts traded at $2.743 per million British thermal units, down 1.4%, after touching an intraday high of $2.788.
LNG feedgas hit 18.0 billion cubic feet per day on Monday, the highest reading in five days. The export signal could not sustain buying pressure beyond a single session. The problem is summer maintenance. U.S. LNG exports slipped to 10.48 million metric tons in July from 10.6 million in June, even as global prices screamed for more. The Japan Korea Marker averaged $19.10 per million British thermal units. Europe's TTF benchmark averaged $18.07. Asia paid a premium over Europe, yet Freeport LNG and other facilities ran maintenance that limited how many cargoes actually left the country.
Europe took 4.76 million metric tons of U.S. LNG in July, up from 4.41 million in June. European storage sat at 57% full as of Aug. 1, well below the five-year average of 74% for that date. That deficit keeps a structural bid under U.S. exports even if the volumes are not accelerating. Asia came in slightly higher at 3.32 million metric tons. Brazil added demand during the Southern Hemisphere winter. Egypt pulled back to 0.63 million metric tons from a record 1.06 million in June, which removed some buying pressure at a moment when the domestic market needed it.
The LNG story is not bearish. It is stuck. Global buyers want the cargoes. U.S. plants cannot deliver enough of them right now to tighten the domestic balance. When maintenance ends and export capacity comes fully back online, that changes. It has not changed yet.
Lower-48 dry gas production reached 112.5 Bcf per day Monday, up 2.6% from a year ago. The EIA raised its 2026 production forecast to 111.2 Bcf per day in July. The rig count held at 127 last week, below February's high but still enough to keep output elevated. There is nothing in the supply data that helps buyers right now.
Storage is the same story. The EIA reported a 28 Bcf injection for the week ended July 24, below the 37 Bcf estimate but still above the five-year average build of 26 Bcf. Working gas is running 6.4% above the five-year seasonal average. One tighter build forced some shorts to cover. It did not erase the surplus.
Weather is the wild card and it has not committed to either side. Commodity Weather Group sees more normal conditions across the East through Aug. 17, which limits cooling demand in the region that moves the needle. NatGasWeather sees broad heat building later this week with much of the country reaching the 90s to 110s. If the East stays moderate while the rest of the country bakes, it is not enough to change the storage trajectory. The market needs heat where the population is.
James Hyerczyk, a technical analyst with over 40 years of experience, outlined the key levels. The new minor range is $2.666 to $2.810. Traders are testing its 50% level overnight, looking for counter-trend buyers to form a secondary higher bottom. The short-term range of $2.979 to $2.666 has a retracement zone at $2.823 to $2.859 that acts as potential resistance. Hyerczyk said a move above $2.859 could trigger an acceleration to the upside. Any rally is likely to be met with selling pressure at the main top near $2.979 and the 50-day moving average at $3.042.
If heavy sellers return, they may take a shot at the multi-month low at $2.666. A break below that would open the next downside target at $2.592.
LNG feedgas near 18 Bcf per day is the floor bulls have to defend. A sustained push higher would signal that maintenance is winding down and export plants are pulling more supply out of the domestic market. Europe's storage deficit keeps the bid alive. Global prices are already there. The missing piece is U.S. export capacity catching up to the demand signal.
The market is stuck between an LNG floor and a production ceiling. The next EIA storage report, due Thursday at 10:30 a.m. ET, and the weather forecasts will pick the winner this week. A smaller than expected build with hotter readings across the East and rising feedgas would bring buyers back. Comfortable injections with moderate Eastern temperatures would put the recent lows back in play and give sellers a shot at the multi-month bottom.
Traders are trying to build a secondary higher bottom after three consecutive sessions of higher highs and higher lows. Any rally runs into resistance near the 50-day moving average. Sellers have been defending that area consistently. The structure says base-building. The burden of proof is on buyers until the market can clear that overhead.
For more on positioning and the short squeeze potential, see Natural Gas: 207K Shorts Face Heat Test as Front-Month Holds Support.
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