Natural Gas News: Chart Analysis Eyes Breakout Above 200-Day MA on Colder Forecast

Winter Demand Expectations Bolster Natural Gas, But Production and Storage Limit Upside

U.S. natural gas futures are trading defensively following a sharp rally to multi-month highs, as traders weigh strong production and storage levels against prospects for rising heating demand. December contracts briefly tested resistance above $4.29/MMBtu to start the week, but upward momentum is now contending with technical ceilings and shifting weather forecasts.

At 16:29 GMT, December Natural Gas Futures are trading $4.269, up $0.003 or +0.07%.

Will Technical Resistance Hold or Trigger a Fresh Breakout?

Natural gas futures are pulling back Tuesday after Monday’s rally stalled just below key resistance levels. December contracts reached $4.298 in early-week trading, testing the long-term pivot at $4.336 and approaching the 200-day moving average at $4.458—both widely viewed as technical inflection points.

The recent advance, driven by colder weather expectations, defined a near-term range between $3.752 and $4.298. Initial support now stands at $4.025. If that pivot fails to hold, the next potential value zone sits near the 50-day moving average at $3.907. On the upside, traders are eyeing a breakout above $4.458, which could open the door to $4.717 if heating demand strengthens.

Weather Outlook Offers Near-Term Support but Mixed Signals Beyond

According to NatGasWeather, demand will remain light through Friday, then increase to moderate levels over the weekend as colder systems track across the northern U.S. NOAA’s latest forecast, however, shows a warming trend in the Southwest from November 7–11 and moderating temperatures along both coasts into mid-month.

This is tempering the bullish sentiment that initially drove prices higher. Traders will be watching for any material changes in forecasts that could push the market decisively in either direction.

Production Remains Elevated as LNG Flows Climb

Fundamentals continue to pose a headwind for further upside. U.S. lower-48 dry gas production was reported at 110.0 Bcf/day on Monday, up 6.6% year-over-year, with active natural gas rigs reaching a 2.25-year high of 125.

Meanwhile, LNG export flows rose 13.5% week-over-week to 16.8 Bcf/day, offering some demand-side support. Despite this, strong production levels continue to pressure prices, especially as inventories remain well supplied.

Inventory and Power Demand Point to Balanced Conditions

Last week’s EIA storage report was neutral, showing a 74 Bcf build—matching consensus but exceeding the five-year average of 67 Bcf. Inventories now sit 4.6% above the five-year seasonal norm, reinforcing the view that the market is adequately supplied. In parallel, U.S. electricity output rose 1.9% year-over-year, with a 2.9% gain over the past 52 weeks, reflecting steady base demand from the power sector.

Market Forecast: Cautiously Bullish

Despite strong supply fundamentals, expectations for increasing winter demand—combined with rising LNG flows and seasonal weather potential—support a cautiously bullish near-term outlook.

Traders should monitor weather updates closely and watch for any break above the 200-day moving average, which could spark renewed buying. Until then, upside appears capped, and the market remains sensitive to production trends and storage levels.

More Information in our Economic Calendar.