Natural Gas News: Bullish Forecast Builds as Futures Rally on Cold Weather Shift

Natural Gas Futures Eye Cold Snap as Prices Rebound Midweek

U.S. natural gas futures are rising midweek, lifted by renewed cold weather expectations, solid export demand, and anticipation of the season’s first storage withdrawal.

After bouncing from a short-term low on Tuesday, December Nymex contracts extended gains early Wednesday, trading firmly above the 200-day moving average at $4.455 — a key technical level now acting as support.

At 14:44 GMT, December Natural Gas Futures are trading $4.527, up $0.156 or $3.57%.

Will Cold Temperatures Spark the First Storage Draw?

Traders are increasingly pricing in colder conditions from November 23–27, especially across the central and eastern U.S. That shift in near-term forecasts has revived bullish sentiment after a weak start to the week.

While longer-range models suggest some moderation in early December, the late-November chill appears sufficient to trigger the season’s first storage draw — with early estimates pointing to a 12 Bcf withdrawal.

The potential shift from injections to draws marks a significant pivot in seasonal fundamentals. It also aligns with positioning from traders who had been bargain hunting after prices shed nearly 30 cents in two sessions prior to Tuesday’s minor reversal.

Production Remains Strong but Demand Is Gaining Traction

On the supply side, U.S. dry gas output remains robust, hitting 108.7 Bcf/d on Tuesday (+5.8% y/y), with rig activity near two-year highs. The EIA also revised its 2025 production forecast up by 1% to 107.67 Bcf/d.

Still, demand is accelerating. Lower-48 gas usage rose to 87.3 Bcf/d (+14.1% y/y), while LNG feedgas volumes held near 17.1 Bcf/d. Electricity consumption is also supportive, with output rising 0.12% y/y in early November and up 2.84% over the trailing 52 weeks.

Storage Levels Still Elevated, but Narrative Could Shift

Last week’s EIA print showed a 45 Bcf injection — well above the consensus of +34 Bcf — keeping inventories 4.5% above the five-year average. However, with the injection season now ending and a draw expected this week, sentiment could flip quickly. In Europe, storage sits at 82% capacity, down from the 91% five-year seasonal average, offering some support to global pricing outlooks.

Short-Term Forecast: Bullish Momentum Builds

With futures reclaiming key technical ground and colder weather poised to generate the first withdrawal of the season, the short-term outlook leans bullish. Upside potential targets last week’s high at $4.688, followed by $4.717. A move back below the 200-day average would shift focus to the support zone between $4.220 and $4.142.

More Information in our Economic Calendar.