EIA Storage Test Meets Fading Gulf Storm Risk
November Nymex Natural Gas is holding its bid Thursday. The storm isn’t the reason to chase it anymore. The Gulf system lost its direct threat to offshore production and LNG infrastructure, and that pulls one risk premium out just as gas reaches the upper end of its short-term recovery range.
Thursday’s EIA storage report is next. A light number keeps shorts careful after this week’s run. The supply cushion, near-record production and warm weather across much of the country are all still sitting there no matter what the number is.
At 12:06 GMT, November natural gas futures are trading at $3.258, up $0.055 or +1.72%. The contract opened at $3.228, reached $3.298 and bottomed at $3.228.
Daily November Natural Gas Futures Technical Analysis
November natural gas futures are trading higher Thursday after extending the rebound from the $2.912 main bottom. The main trend remains down according to the daily swing chart, but counter-trend upside momentum is increasing.
The market crossed to the strong side of the 50-day moving average at $3.043 earlier this week and is now trading above the $3.210 to $3.216 resistance area. Holding that zone would show that buyers are building support under the recovery.
The next upside target is $3.264, followed by the minor top at $3.291. A trade through $3.291 would show that the rally is attracting more than short-covering. The main trend will not turn up unless the market takes out the main top at $3.395.
The 50-day moving average is the first support. A failure to hold it would weaken the recovery and put $2.912 back in play.
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See all Natural Gas forecastsThe Gulf Storm Is No Longer a Supply Threat
The hurricane risk gave November gas a reason to move higher earlier in the week. Gas was already bouncing off last week’s low, and the storm gave shorts one more reason to cover.
That threat has faded. Current tracking doesn’t show anything with a direct path into U.S. offshore production or the big LNG export terminals.
So there’s no lasting bullish case to build around the Gulf. Traders are back to weather, storage and the production number.
Thursday’s Storage Build Matters More Than the Headline
The market is looking for an 82 Bcf injection for the week ended October 2. That’s under the 96 Bcf five-year average and still adds gas heading into the end of injection season.
Last week’s build came in light too. Working gas is a little over 2% above the five-year average, which is plenty to keep buyers from calling every light build the start of a shortage.
The important part of the report is the direction of the cushion, not whether the number beats expectations by a few Bcf.
The EIA still has end-of-October storage near 3,985 Bcf. That would be the most in 10 years. Bulls can trade a friendly weekly number without changing that.
Production Is Still the Weight on the Rally
Output is still running ahead of last year. Lower-48 dry-gas production was 110.8 Bcf per day Wednesday, up 3.0% from a year ago. That is the number sellers keep coming back to.
LNG flows to export terminals picked up 2.3% from the prior week to 18.7 Bcf per day, while U.S. demand was 71.5 Bcf per day, about flat with a year ago. LNG is helping the prompt contract. It is not creating a shortage against this much supply.
The rig count dipped two last week to 133. It is barely off a three-year high. The EIA just raised its 2027 production forecast, too.
Weather and Europe Are Giving Buyers Something to Work With
Cooler weather is the better part of the U.S. forecast. The northern half of the country should see closer-to-normal temperatures from October 11 through October 16, which adds heating degree days in a light shoulder season.
It’s not cold enough to turn the national balance bullish. Warmth is still widespread. The longer-range winter talk is still about a Super El Niño and a warmer Northern Hemisphere.
Europe is the better support story. Storage over there was 73% full as of October 5 against a five-year seasonal average of 88%. That keeps Europe in the market for U.S. cargoes heading into winter.
November gas has a better near-term setup. The fundamentals haven’t given it an all-clear.
What to Watch
The EIA report is the event that matters now. The storm premium has faded, which leaves the storage number to carry the trade by itself. The cooler northern forecast and Europe’s thin storage are the support buyers still have.
November gas traded through the $3.291 minor top early, topping at $3.298, and was back under $3.264 before the New York open. The near-term bias is up while November holds above the 50-day moving average. The main trend stays down until $3.395 is taken out, so this is still a counter-trend rally.
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