Natural Gas Slips as Weak Demand and Muted Summer Heat Weigh

Technical traders are watching the $2.50 level closely. That zone has acted as a floor since May, reinforced by repeated tests and a modest bounce each time. A break below that level could accelerate selling toward $2.30, several traders said. A bounce would need to clear $2.70 to signal a shift in sentiment, and that would require a material change in the supply-demand outlook.

Short-covering provided a pop earlier in the week, with prices briefly touching $2.58 before giving back the gain. That move was driven by traders closing bearish bets after a string of declines, not fresh buying interest, according to broker reports. The underlying fundamentals remain skewed to the downside.

Storage data due Thursday from the Energy Information Administration will be the next test. Analysts surveyed by Reuters expect an injection of around 40 billion cubic feet, roughly in line with the five-year average. A larger-than-expected build would reinforce the bearish case and put more pressure on the $2.50 support. A smaller injection would offer a short-term lift but is unlikely to reverse the broader trend without a sustained heat wave in the forecasts.

The September contract expires later this month, and positioning shifts ahead of expiration often add volatility. For now, the market's direction depends on whether the weather turns hot enough to dent those ample stockpiles.