Natural Gas News: Bearish Market Tone Persists Despite Chilly Weather Reports

Natural Gas Slips as Supply Surplus Overpowers Cold Weather Support

U.S. natural gas futures are trading lower on Tuesday after failing to hold gains from a weather-driven rally at the start of the week. While colder forecasts initially lifted sentiment, the market couldn’t sustain momentum, weighed down by record production and high storage levels. Futures remain above the 50-day moving average at $3.256, a key trend indicator, but upside potential is limited without stronger fundamental support.

At 14:44 GMT, natural gas futures are trading $3.359, down $0.083 or -2.41%.

Can Cold Weather Forecasts Offset Oversupply?

Forecast models trended colder over the weekend, showing below-normal temperatures across the eastern and central U.S. from November 1–10. This helped drive a higher open to start the week, with traders pricing in increased heating demand. However, the rally quickly stalled. Without confirmation that colder conditions will persist deeper into November, weather support appears too weak to challenge the broader bearish tone.

Record Production Continues to Cap Rallies

Lower-48 dry gas production hit 108.2 Bcf/day this week, up 4.2% year-over-year, according to BNEF. The EIA also raised its 2025 production forecast to 107.14 Bcf/day, reinforcing expectations that supply will remain elevated. The number of active gas rigs held at 121, just below a recent multi-year high, pointing to continued upstream momentum. This ongoing supply strength is a key obstacle to sustained price gains.

Storage Builds Above Expectations, Undermining Bullish Cases

Last week’s EIA report showed a storage build of +87 Bcf, exceeding both the five-year average (+77 Bcf) and market consensus (+83 Bcf). Inventories are now 4.5% above seasonal norms and 0.6% higher year-over-year. With the heating season beginning and storage already well supplied, traders remain cautious on the long side. In Europe, storage is at 83% capacity—below the five-year average, but not enough to create export-driven upside.

Demand Indicators Steady but Not Game-Changing

U.S. electricity generation rose 4.0% y/y in the week ended October 18, and LNG feedgas flows were steady at 16.6 Bcf/day (+1.5% w/w), according to BNEF. While supportive, these demand-side figures haven’t shifted the overall balance. With ample supply and only moderate consumption growth, bulls have little to lean on beyond short-term weather changes.

Short-Term Outlook: Bearish Without Stronger Weather Support

The market’s failure to hold Monday’s gains, despite colder forecasts, signals ongoing weakness. With production at record highs and storage remaining comfortable, rallies are likely to face selling pressure unless sustained cold weather develops. The near-term bias is bearish.

More Information in our Economic Calendar.