Natural Gas Prices Face Resistance Amid EIA Forecast Revisions

The US Energy Information Administration (EIA) has lowered its forecast for natural gas prices in the third quarter, predicting an average price of $2.87 per million BTU, a decrease of 50 cents from its previous estimate.

This softer forecast comes amid record inventories and increased domestic production, which could create the largest stockpile in a decade ahead of the start of the heating season.

The main reason for this revised forecast is the rapid increase in domestic natural gas production, which has added to existing inventory levels. Additionally, planned maintenance at the Freeport LNG export terminal may have further reduced demand for liquefaction gas.

Technically, a descending wedge pattern has formed on the XNGUSD chart, with the price currently trading between $2.765 and $2.810. If the breakout proves false, prices could encounter resistance around the pattern’s apex at $2.630 or below the lower boundary at $2.700.