Natural Gas News: Futures Edge Higher Today Ahead of Inventory Report, Cold Snap

Natural Gas Edges Higher Ahead of Weekly Storage Report, Cold Snap Forecast

March Natural Gas futures are edging higher on Thursday ahead of the U.S. Energy Information Administration’s (EIA) weekly storage report, due to be released at 15:30 GMT. Traders could also be reacting to the forecast calling for a cold snap to hit high demand areas Saturday through Thursday.

Storage Draw Expected at 150-161 Bcf, Widening Supply Deficit

Today’s weekly storage report is forecast to show a draw of 150 to 153 Bcf. This puts it at the 5-year average draw of 151 Bcf, after two weeks of nearly record draws.

The analysts at NatGasWeather are predicting a draw of 161 Bcf. If their estimate is close, it will increase the current deficit in supply to 140 Bcf. As of February 6, U.S. natural gas storage was down 3.6% year-over-year and 5.5% below their 5-year seasonal average, signaling tight natural gas supplies. However, the price action suggests the market isn’t too worried about the tightness at this time of year.

In my opinion, this is because strong production is expected to offset the supply gap during the Spring shoulder season, well ahead of the summer cooling season when high supply will be needed. Earlier in the week, the EIA said that their analysts expect 2026 U.S. dry natural gas production to hit 109.97 bcf/day. Last month, the EIA forecast 108.82 bcf/day.

Rig Count Surge from 94 to 133 in Less Than Two Years Is Bearish

Furthermore, the recent Baker Hughes reports have been bearish. Last Friday, the energy company reported that the number of active U.S. natural gas drilling rigs in the week ending February 13 jumped 3 to a two-and-a-half-year high of 133 rigs. Going back to September 2024, the number of gas rigs has risen from a nearly five-year low of 94 rigs. That’s quite a lot of production added in less than two years.

In my opinion, this is the primary reason why traders are not too worried about the deficit at this time.

The Technical Picture: Downtrend Intact, Wide Open Below $2.922

Technically, the trend is down as measured by two metrics, the swing chart and the moving averages.

The trend could turn up on a trade through $3.316, while a trade through $2.922 will reaffirm the downtrend.

Nearby resistance is the retracement zone at $3.284 to $3.502.

The 50-day moving average is guiding the market lower while providing resistance at $3.276. Overtaking this level will shift momentum to the upside with the 200-day MA at $3.734 the next potential target.

Resistance Clustered at $3.276 to $3.316, Downside Open to $2.578

Putting it all together, it looks as if the resistance today is clustered at $3.276 to $3.316.

The downside is wide open under $2.922. We said earlier in the week that breaking the psychological $3.00 level could lead to a hard break into support at $2.595 to $2.578 or a stair-step sell-off. This week’s price action indicates traders have chosen the latter. But once the cold front passes early next week, we could see a sharper break into expiration.

More Information in our Economic Calendar.