Natural Gas Price Forecast: NG=F Extends Collapse to $2.69 as Supply Glut Deepens

Natural Gas Futures Collapse to $2.69 as Weather and Storage Pressure NG=F

The benchmark Natural Gas (NG=F) contract closed the week at $2.69 per MMBtu, marking a fresh nine-month low and setting up the most bearish summer close in nearly half a century. The selloff was triggered by unseasonably cool August weather that slashed power burn demand, overwhelming what had been a bullish storage print earlier in the week. Henry Hub, the U.S. pricing benchmark, slipped another 7.48% for the week, its fifth consecutive weekly decline, leaving sentiment deeply negative heading into September. Analysts note the weekly close below $2.73 confirms a broad bear trend, with downside targets now clustered between $2.54 and $2.51 based on Fibonacci projections and prior swing levels.

Oversupply and Record Production Keep Bears in Control

Production in the Lower 48 averaged 108.4 Bcf/d in August, up from the record 107.8 Bcf/d set in July, according to LSEG data. With storage now running about 6% above the five-year average, injections are on pace to push inventories close to 4 Tcf by season’s end. This oversupply has overwhelmed earlier bullish catalysts, including a two-day rebound in LNG feedgas demand of 1.8 Bcf/d. Average flows to U.S. LNG export facilities this month stand near 15.8 Bcf/d, just shy of the all-time record of 16 Bcf/d, but this demand surge has not been enough to offset the weight of record production and easing domestic consumption.

Regional Pricing Pressures and Hub Divergence

Spot market data shows the depth of weakness across regional hubs. At Henry Hub, prices gained a modest $0.075 to close near $2.76, but regional hubs painted a more bearish picture. SoCal Citygate plunged $0.30, while Transco Zone 5 sank by $0.20, both reflecting weak summer cooling demand. In the Northeast, Algonquin Citygate fell $0.04, while the Chicago Citygate shed $0.005. The outlier was Northwest Sumas, which spiked by $0.385 on pipeline constraints and Canadian supply disruptions, underscoring localized volatility despite a national glut.

Bearish Technicals Confirmed With Channel Breakdown

Price action in NG=F remains pinned below the midline of a descending channel, reinforcing downside bias. The break of key support at $2.73 triggered accelerated selling momentum, with RSI deeply entrenched in oversold territory but showing no signs of reversal. A measured move from the breakdown projects toward $2.63, with the broader confluence support at $2.54–2.51 seen as the more meaningful line in the sand. Bulls would need to reclaim $2.85, the interim swing high from Thursday, to even begin challenging the prevailing bearish structure, though resistance at $2.92 and $3.14 looms above.

Weather Shifts Undermine Summer Demand Outlook

Meteorologists report August is trending as the coolest in 25 years, sapping late-summer cooling loads that typically bolster natural gas power burn. With highs in the 70s across the Midwest and East, utilities are burning less gas for electricity, pushing power burn down from above 55 Bcf/d in July to the low 50s in mid-August. September forecasts are mixed, with some hotter-than-normal projections providing a potential floor for NG=F, but the immediate impact has been an erosion of late-summer demand just as production hits records.

Global LNG Dynamics Add to Volatility

In the global LNG market, Asian spot prices slid to $11.40/MMBtu, down from $11.65 the prior week, amid weak demand and high inventories. Europe, meanwhile, faces renewed supply concerns as Norwegian maintenance trims flows, and EU storage sits at just 75% full versus 90% last year, raising winter vulnerability. European TTF futures rebounded above €33/MWh after hitting a 15-month low at €31, reflecting tightness ahead of winter. U.S. LNG exporters may benefit if European buyers bid more aggressively, but for now, elevated production and muted domestic demand keep U.S. natural gas futures on the defensive.

Company-Level Impact: Range Resources Exposed to Price Weakness

Producers like Range Resources (RRC) are already feeling the sting of collapsing prices. The company’s realized natural gas price fell 13% quarter-over-quarter to $3.49/Mcfe even after hedging, cutting adjusted free cash flow from $250 million in Q1 to $147 million in Q2. Management guided for 2.225 Bcfe/d production in 2025, up 1% from prior forecasts, but hedges only cover about 40% of H2 production at $4.07 floors, leaving the company exposed to spot weakness. With natural gas strip pricing around $3.10 for H2 2025, Range expects free cash flow to drop below $150 million in the back half versus $400 million in the first half, a dramatic swing tied directly to NG=F’s collapse.

Market Sentiment: Bearish Streak Raises Risk of Capitulation

The current five-week losing streak in natural gas futures marks the longest since December 2023, underscoring sustained selling pressure. Traders describe sentiment as “most bearish in nearly 50 years” given the combination of record output, weak weather-driven demand, and ballooning storage. Still, volatility remains high, with localized price spikes like Sumas and SoCal Border showing that infrastructure constraints can drive sharp moves even within a bearish national trend. For now, with NG=F entrenched below $2.70 and technicals aligned to the downside, traders are bracing for another test of the $2.50 handle before any durable recovery attempt.

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