Natural Gas News: Colder Forecast Adds HDDs as Futures Push Toward the 200-Day MA

U.S. Natural Gas Futures Surge Ahead of Early Storage Report

Natural gas futures climbed sharply on Wednesday as traders positioned for the weekly EIA storage report, scheduled a day early due to the U.S. holiday. The rebound follows a brief dip to $4.390—the lowest level since November 3—before buyers stepped in near key technical support.

At 16:45 GMT, January Natural Gas Futures are trading $4.606, up $0.125 or $2.79%.

Colder Forecasts Fuel Buying Interest

Weather models are adding fuel to the rally, with the American model tacking on 15 heating degree days (HDDs) to December projections. According to NatGasWeather.com, national demand will surge to strong levels late this week and through next week as frosty weather systems sweep across the northern and central U.S. A brief warmup is expected in the Dec. 6-12 window, though overnight data trended slightly colder even in that period.

Production remains elevated at 110 Bcf/d, but the colder outlook is shifting sentiment toward tighter balances in the weeks ahead.

Technical Picture: Key Levels in Focus

Wednesday’s low of $4.390 landed nearly squarely on the intermediate 50% retracement level at $4.397, just above the 50-day moving average at $4.360. This zone is acting as both support and a trend indicator.

On the upside, the 200-day moving average at $4.732 represents potential resistance and a trigger point for an acceleration higher. A decisive break above that level could open the door for extended gains, while a failure to hold the $4.360 support would signal renewed downside pressure.

Storage Draw Expected Below Seasonal Norms

The consensus estimate for this week’s EIA report calls for a modest 5 Bcf draw. Last week’s report proved bullish, showing a 14 Bcf withdrawal versus expectations of 12 Bcf and well below the five-year average build of 12 Bcf for the same period. As of November 14, inventories stood 0.6% below year-ago levels but remained 3.8% above the five-year seasonal average, indicating adequate domestic supplies heading into winter.

European Gas Weakens on Diplomacy, Mild Temps

Across the Atlantic, European natural gas prices slipped 0.7%, with the Dutch TTF benchmark settling at €29.18 per megawatt hour. Hopes for progress in Ukraine-Russia negotiations and forecasts for milder early-December temperatures weighed on prices.

EU storage levels remain below the 90% target set for Dec. 1, though warmer weather could allow for additional inventory builds. ING analysts caution that widening price differentials between Europe and Asia may reduce incentives for LNG suppliers to ship cargoes to Europe if the trend continues.

Outlook: Bullish Bias on Weather-Driven Demand

The near-term outlook for U.S. natural gas leans bullish. Colder December forecasts, a supportive storage backdrop, and elevated heating demand expectations should underpin prices. A sustained move above the 200-day moving average at $4.732 would confirm bullish momentum, while the 50-day moving average at $4.360 remains the key downside level to watch. Traders will closely monitor the EIA report and extended weather models for confirmation.

More Information in our Economic Calendar.