Potential Decline of Natural Gas Prices to $2.43–$2.74Brief Overview of Events and News Explaining the Potential Decline of Natural Gas Prices to $2.43–$2.74.
➖ Weather Forecast and Reduced Demand
On April 23, 2025, the U.S. National Weather Service forecasted milder-than-average weather across the U.S. for late spring and early summer 2025, particularly in key gas-consuming regions like the Northeast and Midwest.
Warmer weather reduces the demand for heating, a primary driver of natural gas consumption. This led to a 2.5% decline in Henry Hub natural gas futures, settling at $3.05 per MMBtu on April 24, 2025.
Source: Reuters
➖ High U.S. Natural Gas Inventories
The U.S. Energy Information Administration (EIA) reported on April 17, 2025, that natural gas inventories increased by 75 billion cubic feet (Bcf) for the week ending April 11, 2025, significantly exceeding the five-year average build of 50 Bcf. Total U.S. inventories are now 20% above the five-year average, indicating an oversupply that pressures prices downward.
Source: EIA, "Weekly Natural Gas Storage Report," April 17, 2025
➖ Weak Global LNG Demand
On April 22, 2025, Bloomberg reported a decline in demand for liquefied natural gas (LNG) in Asia, particularly in China, due to an economic slowdown and a shift to cheaper coal alternatives. China’s LNG imports in Q1 2025 dropped 10% year-over-year, reducing export opportunities for U.S. gas producers and adding pressure on domestic prices.
Source: Bloomberg, "China’s LNG Imports Fall as Coal Use Rises," April 22, 2025
Technical Analysis
Natural gas futures (NYMEX) are currently around $3.15 per MMBtu as of April 28, 2025, following a recent decline from a peak of approximately $4.90 in 2025.
Fibonacci retracement levels indicate correction targets at 38.2% ($2.74) and 50% ($2.43).
Fundamental factors, such as oversupply and reduced demand, support a bearish scenario that could drive prices to these levels in the near term.
Nearest Entry Point Target:
• $2.74
Growth Potential:
Long-term:
• $10
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