Natural Gas News: Bearish Forecast Deepens as Traders Look to Fill the Gap at $3.748

Natural Gas Slips Below Key Levels as Warmer Forecasts and Strong Output Weigh

U.S. natural gas futures extended losses midweek as sellers pushed the market below key technical thresholds. Prices have retreated beneath the 50-day moving average of $3.875, now acting as near-term resistance. Warmer weather trends and strong production levels are dragging on sentiment, while the approaching contract expiration is adding short-term pressure.

At 14:16 GMT, Natural Gas Futures are trading $3.824, down $0.043 or -1.11%.

Is Weather Shifting Too Warm for Bulls to Hold Ground?

The initial bullish spark from colder weekend model runs has faded. After a firmer open on Monday due to chillier expectations for November 4–6, updated forecasts have trended warmer for November 4–11. Despite temperatures still expected to be below normal in the East, reduced heating demand is now anticipated, triggering renewed selling. Vaisala and NatGasWeather both point to moderate demand through early next week, with high pressure dominating the West and highs in the 50s–80s limiting national drawdowns.

Production Strength Adds Bearish Weight

Fundamentals are leaning heavy on the downside. U.S. dry gas production hit 106.6 Bcf/day on Tuesday, up 2.7% year-over-year, near record territory. EIA’s revised outlook now sees 2025 production rising to 107.14 Bcf/day, a modest increase that reinforces expectations for strong supply. Active gas rigs remain near a multi-year high, with Baker Hughes reporting 121 rigs in operation, unchanged from the prior week.

Storage and Exports Struggle to Offset Oversupply

Storage continues to signal adequate supply. Last week’s EIA report showed a +87 Bcf injection, surpassing both the consensus estimate (+83 Bcf) and the 5-year average (+77 Bcf). Inventories now sit 4.5% above the seasonal norm. European gas storage is slightly below normal at 83% full, though this is not yet a bullish catalyst for U.S. exports. LNG net flows dipped 0.5% week-over-week to 16.4 Bcf/day, providing little relief from domestic oversupply.

Will Prices Fill the Gap to $3.748 Before Support Holds?

Natural gas is currently straddling a critical 61.8% retracement level at $3.803. If this level breaks convincingly, prices could slide toward $3.748 to fill the October 20 gap. With resistance clustered at $3.867–$3.875 and no fresh bullish catalysts in sight, any upside move would likely require short-covering momentum rather than fresh buying.

Market Forecast: Bearish Short-Term Outlook

With warming forecasts into mid-November, robust U.S. production, and ample storage, the near-term outlook remains bearish. Sellers are in control unless weather shifts colder or exports pick up meaningfully. Unless $3.803 holds, traders should prepare for a test of the $3.748 gap zone. A failure at this level will put $3.595 on the radar.

More Information in our Natural Gas Futures.