Natural Gas Futures Consolidate Near Range Lows as Supply Glut Meets Geopolitical Risk

Natural gas futures have spent the past several weeks compressing near the lower end of a broad consolidation range between the 2.6 and 3.33 areas, with the yearly VWAP flat and price chopping through it in a sign of balance. Domestically, record production and storage injections running below the five year average have kept a lid on any sustained rally, even as a heat dome across the South drives strong cooling demand. Globally, the ongoing conflict disrupting shipping through the Strait of Hormuz has removed a significant share of LNG supply from the market and pushed European benchmarks to their highest levels since January 2023. With the market squeezed between these opposing domestic and international forces, watch the edges of the range, 2.6 on the downside and 3.33 on the upside, for the next directional signal heading into the fall shoulder season.Natural gas storage facility by roibu via Adobe Stock