XNG/USD Analysis: Natural Gas Price Drops to March Low

On 27 January, our analysis of the natural gas chart highlighted the formation of an ascending channel. Later, on 10 March, we noted that the sharp price increase had created technical conditions for a correction.

Since then, as indicated by the arrow on the XNG/USD chart, natural gas prices have declined by approximately 19%.

Why Is the Price of Natural Gas Falling?

• Unseasonably Warm Weather: Atmospheric G2 reported on Wednesday that forecasts now indicate significant warming across the eastern half of the U.S. from 31 March to 4 April. This could reduce demand for natural gas used in heating.
• Rising Inventories: According to the EIA’s forecast, weekly natural gas storage levels are expected to increase by +33 billion cubic feet over the past week.

Technical Analysis of XNG/USD Chart

Looking at the broader trend since the start of the year, the ascending channel (marked in blue) remains relevant. However, bears have pushed the price below its median line, shifting movement into a short-term downward channel (marked in red).

Currently, natural gas is trading near the $3.780/MMBtu level, a key price point that has previously acted as both support and resistance. Whether a bearish breakdown or a bullish rebound occurs largely depends on the upcoming EIA report, scheduled for release at 17:30 GMT+3.

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