Natural Gas News: Bearish Market Forecast as Weather and Inventory Weigh on Futures

Natural Gas Slips as Weather and Supply Pressure Weigh on Market

U.S. natural gas futures are trading lower following a sharp drop on Tuesday, driven by mild weather forecasts and strong supply fundamentals.

Prices broke below the August 25 low of $2.986 in early trading Wednesday before bouncing slightly from $2.964, just above key support at $2.938.

While not yet signaling a reversal, the technical defense at that level has traders watching closely for a potential near-term bounce.

At 13:29 GMT, U.S. Natural Gas Futures are trading $3.009, down $0.0019 or -0.63%.

Is Mild Weather Delaying Seasonal Demand?

Milder-than-normal weather across much of the U.S. through late October continues to dampen near-term heating demand.

The Commodity Weather Group projects above-average temperatures across the eastern half of the U.S. from October 19–23, limiting upside potential for gas in what is typically a shoulder period for consumption.

NatGasWeather forecasts only light to moderate demand in the next seven days, citing a warm central and southern U.S. and only brief cool shots in the Northeast.

Production and Storage Add to Downward Pressure

On the supply side, natural gas production remains a key bearish driver. The EIA recently raised its 2025 U.S. natural gas production forecast by 0.5% to 107.14 Bcf/day, while Bloomberg data shows current Lower-48 output at 106.7 Bcf/day, up 3.8% year-over-year.

At the same time, gas demand on Tuesday stood at just 66.4 Bcf/day, down 7.8% y/y. U.S. gas inventories also continue to run above average; the latest EIA storage report showed a build of +80 Bcf, slightly above expectations and 4.5% above the five-year seasonal norm.

Is LNG Export Demand Providing Any Support?

LNG exports remain one of the few bright spots. Estimated net flows to U.S. LNG export terminals reached 16.2 Bcf/day on Tuesday, up 7.7% week-over-week, helping absorb some domestic oversupply.

However, with European storage already 83% full—albeit below its five-year seasonal average—there may be limits to how much additional export strength can support prices in the near term.

Could Technical Buying Trigger a Short-Term Rally?