Natural Gas News: Bears in Control, But Cold Weather Could Challenge the Market View

Natural Gas Holds Bearish Tone as Supply Pressure and Mild Weather Undercut Rallies

U.S. natural gas futures are struggling to find sustained upside as fundamentals remain tilted toward oversupply and mild seasonal demand. While last week closed with a modest technical rebound off multi-month lows, the broader setup continues to favor bearish conditions, especially in the absence of a weather-driven demand catalyst or significant tightening in storage.

Is Production Growth Overwhelming Demand?

Production remains a major weight on the market. Lower-48 output reached 107.9 Bcf/d by Friday, up nearly 3.7% year-over-year, with the EIA raising its 2025 output forecast to 107.14 Bcf/d — a new high.

The rig count, holding near a two-year high at 121, reinforces the resilience of U.S. gas supply despite recent price weakness. This robust production environment is outpacing domestic consumption, which continues to lag; Friday’s U.S. gas demand was reported at just 69.7 Bcf/d, down 6% from a year ago.

Are Storage Surpluses Limiting Any Bullish Breakout?

Inventory levels remain well above average. The EIA reported an 80 Bcf injection for the week ending October 10, pushing total stocks to 3,721 Bcf — 154 Bcf above the five-year average. While the build slightly missed expectations, it was enough to reinforce the perception of comfortable supply ahead of winter.

Regional builds were broad-based, including a 30 Bcf addition in the Midwest and 20 Bcf in the South Central, with the latter now sitting more than 5% above historical norms.

Does LNG Demand Offer Relief?

LNG exports have edged higher, with flows to terminals reaching 16.2 Bcf/d, up 2.3% week-over-week. However, the global backdrop isn’t offering enough support.

European gas storage sits at 83%, below the five-year average but still ample. Despite record export flows, domestic oversupply and muted weather-related demand are keeping the market firmly on the defensive.

Can Technical Support Hold Up in a Bearish Market?

From a weekly technical standpoint, natural gas settled at $3.008, down 3.16%. Key support levels at $3.063, $2.986, and $2.938 were all breached during the week, although the market did recover $2.938 at the close. A confirmed longer-term trend reversal won’t occur until $3.585 is broken to the upside, with the 52-week moving average at $4.034 remaining strong resistance.

Market Forecast: Bearish with Limited Rally Scope

While a short-term bounce could extend toward $3.237–$3.24, any rally is expected to face strong selling pressure. Bearish fundamentals—led by surging production, weak demand, and high storage—remain firmly in control. Without a sustained cold weather pattern or a supply-side disruption, traders should expect further consolidation or downside retests of $2.938 or lower.

More Information in our Economic Calendar.