Natural Gas News: Forecast Eyes Volatility as Weather and Inventory Shape Market Outlook

Natural Gas Futures Post Weekly Gain, But Forecasts and Fundamentals Curb Bullish Momentum

Natural gas futures finished higher last week, notching a gain of more than 5%, as the market responded to early cold weather, firm support levels, and speculative buying.

However, the rally faded late in the week following a bearish government storage report and updated weather forecasts calling for mild conditions into late November. Despite the weekly advance, the market remains vulnerable to a short-term pullback as traders reassess demand expectations.

Did Fundamentals Justify the Early-Week Rally?

December futures settled at $4.566, up $0.251 or +5.82% on the week. Early strength was driven by forecasts for colder-than-normal temperatures and a strong technical bounce off key support at $4.336.

LNG exports also lent some support, rising 5.9% week-over-week to 17.7 Bcf/day. However, the rally lost steam after the EIA reported a storage build of +45 Bcf — well above the consensus of +34 Bcf and the five-year average of +35 Bcf. Inventories now stand 4.5% above the five-year average, reinforcing the market’s oversupplied status heading into winter.

Dry gas production remains robust, averaging 109.9 Bcf/day, up 7.1% from a year ago. Meanwhile, demand slipped to 80.0 Bcf/day, down 5.5% year-over-year. The EIA also raised its 2025 output estimate by 1% to 107.67 Bcf/day, further highlighting the persistent supply pressure.

Are Bulls Losing Momentum After Failing at Key Resistance?

From a technical standpoint, the main trend remains up on the weekly chart, but the rally stalled after testing a critical resistance level. Last week’s high came within striking distance of the long-term 50% retracement level at $4.676 — a key barrier bulls must overcome to extend the uptrend. A sustained breakout above this level would likely open the door to a test of the 61.8% retracement at $4.931. A weekly close above $4.676 would indicate strong buying conviction and shift short-term sentiment firmly in favor of the bulls.

However, the inability to clear this zone signals that sellers are active near value. The rejection sets up the potential for a pullback into the first key support area — the 52-week moving average at $4.426. A failure to hold this level would put the intermediate pivot at $4.336 back in play. Below that, the next major support zone sits between $4.142 and $4.013, a retracement band likely to attract longer-term buyers if tested.

For bulls, defending $4.426 and $4.336 will be critical to maintain the “buy-the-dip” structure. A bounce from these levels could trigger renewed momentum toward $4.676 and beyond. For bears, a break below $4.336 would suggest that the rally has fully unraveled, opening the door for a deeper correction toward $4.142 – $4.013.

Volatility is likely to remain elevated, especially as traders weigh short-term warmth against potential cold in early December. The market remains in uptrend mode, but it’s at a technical crossroads where the next move will likely be decisive.

Weekly Forecast: Cautiously Bullish With Pullback Risk

Although the trend is up, last week’s failure near resistance and the bearish storage print point to a short-term correction. If prices revisit the $4.426 to $4.336 area and hold, bulls may step in again. Traders should be prepared for volatility as weather models continue to evolve, with the potential for renewed upside in early December if cold returns. Until then, the market is likely to remain rangebound with a bullish bias on dips.

More Information in our Economic Calendar.