Natural gas futures are moving closer to a potential breakout as the market reacts to tighter supply signals, stronger cooling demand and a shrinking storage surplus.
The July contract has moved above $3.30, putting immediate focus on resistance near $3.387. A clear move above that level would strengthen the bullish case and could open the way towards $3.651 and $3.734. If buyers fail to hold momentum, support around $3.141 becomes the key level to watch.
US natural gas inventories remain above normal, but the surplus has narrowed. The market has less excess supply than before, making prices more sensitive to weather, weekly storage data and production changes.
The next storage report is an important timing point. A smaller injection would support the view that the market is tightening and could help prices extend gains. A larger build would weaken the breakout case and may trigger selling from short-term traders.
Weather is also supporting prices. Hotter conditions in the western United States are expected to increase air-conditioning demand, which should lift natural gas use by power generators. Cooler weather in the Midwest and East limits some of that demand, so the market still needs broader heat to build stronger momentum.
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