Natural Gas News: Colder Forecasts Boost Demand and Fuel Bullish Price Rebound

Natural Gas Futures Rebound as Colder Forecasts Support High Demand Outlook

Natural gas futures turned higher early Wednesday as traders responded to fresh overnight forecasts that trended colder for mid-December. After shedding over eight cents on Tuesday due to warmer weather projections, prices swiftly rebounded in overnight trading, briefly piercing the $4.953 level before meeting resistance just under $5.

The shift back to colder outlooks—particularly for December 12–14—helped reverse Tuesday’s losses, renewing expectations for strong heating demand in the coming weeks. The cold push follows Tuesday’s bearish session, which was triggered by updated midday weather data showing warmer trends across the East and South for the same period.

At 14:28 GMT, January Natural Gas futures are trading $4.934, up $0.094 or +1.94%.

Is Demand Starting to Outpace Surging Supply?

Demand fundamentals remain strong. Lower-48 U.S. gas demand hit 114.8 Bcf/d on Tuesday, up 1.5% year-over-year, according to BNEF. Cold systems crossing the northern U.S. are expected to maintain elevated national consumption through at least December 9. The East will see mixed temperatures, while much of the West and South stay mild. Overall, demand is projected to remain high in the near term, tapering only slightly to moderate-high levels.

However, surging production continues to act as a counterweight. U.S. dry gas output reached 112.7 Bcf/d Tuesday—up 7.5% y/y—hovering near record highs. Active gas rigs climbed by three to 130 last week, marking a 2.25-year high and reinforcing long-term supply strength.

How Did Storage and Global Factors Influence the Bounce?

The most recent EIA storage report showed a draw of -11 Bcf for the week ended November 21, slightly larger than consensus but still below the five-year average of -25 Bcf. Inventories remain 4.2% above the five-year seasonal norm, tempering near-term supply concerns.

Globally, European gas storage is 75% full—well below its five-year seasonal average of 86%—which may support future LNG flows, although U.S. LNG export feedgas demand slipped 2.1% week-over-week to 17.6 Bcf/d.

Is Weather-Driven Volatility Signaling a Bullish Setup?

Traders are eyeing whether the colder overnight model runs will extend into midday updates, potentially pushing January contracts back toward the $5.00 mark. The 200-day moving average at $4.731 is providing technical support for now, with key levels below at $4.627 and $4.420 if sentiment sours.

Short-Term Forecast: Bullish

With weather models trending colder, strong near-term demand, and resilient price action despite surging supply, the short-term outlook leans bullish. If updated midday forecasts maintain or deepen the cold outlook into mid-December, further gains toward $5.00 are likely, supported by seasonally strong fundamentals.

More Information in our Economic Calendar.