Natural gas price analysis: Levels to watch as the US breaks LNG export records
Natural gas price in the US is set for its third week of gains after rallying to a level last recorded in March 2025. Forecasts of cold and dry Arctic winds and the resultant drop in temperature have fueled a bullish outlook for the ensuing weeks. Besides, the country has ramped up LNG exports to Europe ahead of its winter season.
Natural Gas Price Rallies on Bullish Outlook
Natural gas price has rallied to a months-long high as the market responds to tight storage and heightened demand. According to the EIA weekly storage report, the amount of working gas in storage stood at 3,915 Bcf as of 31st October. While the figure represents a surge of 33 Bcf from the previous week, it is 6 Bcf below the reported stock at a similar period in 2024. In the ensuing weeks, the market expects modest storage builds as the weather gets cooler and LNG exports remain at record levels.
Data released by financial firm LSEG indicated that the US exported 10.1 million metric tonnes (mmt) of LNG in October. This makes it the first country to hit the monthly mark of 10 mmt. In the previous month, it exported 9.1 mmt of LNG. Since the start of the year, it has had four record-hitting months.
Notably, the US is already the leading exporter of liquified natural gas worldwide. Still, it has been ramping up production through its new projects while striving to secure a larger market share in Europe. In October, close to 70% of its LNG exports were directed to Europe as the continent accumulates the fuel ahead of the winter season.
At the same time, an extreme cold snap is expected in eastern and central US from next week as highlighted by the country’s Weather Prediction Center. The expected cold and dry Arctic winds are set to cause record low temperatures; increasing the demand for natural gas.
Natural gas price technical analysis
Natural gas price chart | Source: TradingView
On Thursday, Henry Hub natural gas price reversed the losses recorded in the previous session, even as it remained within a rather tight range. At the start of the week, the spot price rallied to an 8-month high on the back of a bullish demand outlook.
Even with the pullback, the asset is on track to record its third straight week of gains. Besides, I expect it to hold steady above the support zone of $4.00 per MMBtu. Prior to a week ago, that level had been evasive for about seven months with only a brief surge above it in mid-June.
At its current level, natural gas price is trading within the overbought territory with an RSI of 72. In the short term, it may remain range-bound before the bulls gather enough momentum to hit a fresh 8-month high.
With this in mind, the range between $4.10 and $4.46 will be worth watching in the ensuing sessions. Further rallying will likely activate the upper resistance zone of $4.55. On the flip side, a pullback past $4.05 would invalidate this bullish thesis.
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