Will technical resistance for the October natural gas contract hold?
That was the question Eli Rubin, an energy analyst at EBW Analytics Group, asked in an EBW report sent to Rigzone by the EBW team on Tuesday, which highlighted that the October natural gas contract closed at $3.090 per million British thermal units (MMBtu) on Monday. That figure marked a 4.2¢, or 1.4 percent, rise on Friday’s close, the report outlined.
“The NYMEX front-month briefly tested as high as $3.198 yesterday – pushing through technical resistance at $3.13 – before falling 10.8¢ into the close,” Rubin noted in the report.
“Another technical retest of $3.20 per million British thermal units may be coming this morning, aided by a modest upturn in CDDs [cooling degree days] and decline in production readings,” he added.
However, Rubin warned in the report that the near-term fundamental picture “hardly warrants extensive optimism”.
“Mid to late September warmth is modestly supportive, but also partially offset by stalling heating demand,” he added.
“Tropics have been quiet, for now. Storage is rising faster than at a typical seasonal pace. Pipeline maintenance appears a key support of Henry Hub spot pricing,” he continued.
Rubin went on to state in the report that the medium to long term structural outlook is robust.
“Natural gas has surpassed multiple technical resistance levels over the past two weeks to add to momentum,” he said.
“With storage likely to surpass 3,650 billion cubic feet by October 2nd – and chances for a mild October – the durability of the recent rally is uncertain despite a bullish long-term outlook for NYMEX gas,” he added.
In a separate EBW report sent to Rigzone by the EBW team on Monday, Rubin noted that “weekend weather and LNG demand gains may align with bullish technicals to pose renewed risks of breaking higher short-term”.
“Long-term fundamentals appear robust. Still, a rising storage surplus vs. the five-year average paired with risks of either another balmy October or tropical demand destruction suggest ongoing caution about the durability of the recent move higher,” Rubin went on to warn in that report.
A research note sent to Rigzone by the JPM Commodities Research team on Saturday showed that J.P. Morgan expects the U.S. Natural Gas Henry Hub price to average $3.45 per MMBtu in the third quarter of 2025, $3.75 per MMBtu in the fourth quarter, and $3.62 per MMBtu overall in 2025.
In its latest short term energy outlook (STEO) at the time of writing, which was released on August 12, the U.S. Energy Information Administration (EIA) projected that the Henry Hub natural gas spot price would average $3.25 per MMBtu in the third quarter of 2025, $3.87 per MMBtu in the fourth quarter, and $3.61 per MMBtu overall in 2025.
EBW Analytics Group provides independent expert analysis of natural gas, electricity, and crude oil markets, the company’s site states. Rubin is an expert in econometrics, statistics, microeconomics, and energy-related public policy, the site adds, noting that he is “instrumental in designing the algorithms used in our models, and in assessing the potential discrepancies between theoretical and practical market effects of models and historical results”.
On its site, J.P. Morgan describes itself as a leading global financial services firm with assets of $3.9 trillion and operations worldwide. The company has “a legacy dating back to 1799”, its site points out.
The EIA describes itself on its website as the statistical and analytical agency within the U.S. Department of Energy. It “collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment”, the EIA’s site states.
To contact the author, email andreas.exarheas@rigzone.com
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