Natural Gas News: Cold Snap and Light Storage Build May Fuel Natural Gas Rally

Natural Gas Traders Eye EIA Report as Prices Hover Near Key Resistance

U.S. natural gas futures eased slightly in early Thursday trade as traders booked profits ahead of the latest EIA storage report. This pause follows a strong upside move in the previous session, when prices broke above the 50-day moving average for the first time in over three months. That technical breakout has shifted short-term sentiment, bringing fresh targets into focus.

At 12:27 GMT, U.S. Natural Gas Futures are trading $3.421, down $0.055 or -1.58%.

Can the 50-Day Moving Average Hold as Support?

The 50-day moving average, now sitting at $3.294, is acting as immediate support following Wednesday’s gap higher. Bulls are watching the $3.489 swing top and the nearby 50% retracement level at $3.529. A decisive move above $3.529 could trigger fresh momentum, setting sights on the $3.870 pivot and even the 200-day moving average at $4.199—though that would require sustained fundamental support.

Colder Weather Outlook and Low Storage Build Boost Sentiment

Nat-gas prices got a lift mid-week on forecasts for below-normal temperatures across the U.S. in early to mid-October. Vaisala projects a cold front sweeping from the Midwest to the East between October 6–10, with further cooling in the West from October 11–15. These colder forecasts contrast sharply with the current low-demand setup—where the majority of the U.S. is experiencing mild-to-warm conditions under high pressure through October 7.

EIA Storage Report in Focus as Market Eyes Smaller Build

Traders are also positioning for a smaller-than-average EIA storage build, with consensus pointing to a +64 Bcf injection for the week ended September 26—well below the five-year average of +85 Bcf. This comes after last week’s build of +75 Bcf, which landed just above expectations but still under the seasonal norm.

As of September 19, inventories were up 0.5% year-over-year and stood 6.1% above their five-year seasonal average, signaling adequate supply. In Europe, gas storage was 83% full as of September 28, below the 89% seasonal average for this time of year.

Do Surging Production and Lagging Demand Pose a Ceiling?

Despite bullish weather and storage trends, strong U.S. gas production remains a major headwind. Lower-48 dry gas output hit 107.5 Bcf/d on Wednesday, up 5.8% year-over-year. Meanwhile, gas demand is lagging at 66.2 Bcf/d, down 7.5% from a year ago. LNG exports offered little help, with net flows to terminals slightly lower at 15.4 Bcf/d.

Adding to the supply pressure, the EIA recently raised its production forecast for 2025 to 106.63 Bcf/d. Although active drilling rigs slipped by 1 to 117 last week, they remain just below the 2-year high of 124 rigs posted in early August.

Short-Term Outlook: Cautiously Bullish Above Key Levels

If prices hold above the 50-day MA and breach the $3.529 resistance level, a bullish move toward $3.870 could develop. However, elevated production and subdued demand are likely to cap gains unless weather forecasts continue to support heating demand and the EIA confirms smaller-than-expected builds. A failure to hold $3.294 support would suggest momentum is fading, triggering a possible pullback.

More Information in our Economic Calendar.