Earlier in the session, natural gas futures attempted to build on Tuesday’s rally by pushing through a multi-month high. However, the move lost momentum when buyers failed to show up in force. Despite the pullback, the market remains above the 200-day moving average at $4.453, a key technical level that could determine whether the rally continues.
A sustained move above the 200-day MA could trigger a surge into the next major upside target near $4.717, a main top. On the flip side, a break below $4.453 would signal renewed selling pressure. If that break is confirmed, downside momentum could drive prices lower toward a pair of 50% retracement levels at $4.167 and $4.089.
Trader reaction to the 200-day MA is likely to set the tone heading into Thursday’s session.
Record Output Continues as Producers Tighten Costs
Production remains strong, with the EIA projecting dry gas output will rise to 107.1 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024. Demand — including exports — is expected to climb to 115.7 bcfd next year. LNG feed gas demand is already near record highs, and domestic use continues to expand due to power generation and industrial demand.
Major producers are growing volumes while cutting costs. Expand Energy led all firms with 7.33 billion cubic feet equivalent per day (bcfed) in Q3 and has increased its 2025 output target. EQT pulled 6.89 bcfed in Q3 and plans to produce slightly more next year while reducing capex. Coterra Energy also raised its 2025 gas supply guidance as drilling costs in the Marcellus dropped 24% from a year ago.
