Natural Gas Falls Short of $3.00 Amid Supply Pressure

Natural gas failed to hold above the $3.00/MMBtu level on August 28, despite a strong EIA report that showed a smaller-than-expected increase in storage levels.

The September contract expired at around $2.907, up 2.3% from the previous day, but the price action suggests that significant supply remains in the $2.98-3.00 area.

The market's inability to break above $3.00 after a fundamentally bullish storage report is seen as an important technical signal, with traders warning of a risk of a return towards $2.85-2.80.

Despite the current pullback looking like more than just profit-taking, the medium-term balance remains supportive due to strong power demand and LNG feedgas demand.