Natural Gas News: Futures Extend 3-Day Rally on Chart Breakout and Colder Weather Forecast

Natural Gas Futures Extend Rally as Traders Eye Resistance Despite Bearish Weather

U.S. natural gas futures extended their rally at mid-session Wednesday, surging above key technical levels as momentum builds for a third straight session.

Despite bearish short-term weather demand signals, futures pushed above the 50-day moving average at $3.294, with additional support seen at $3.261 and $3.238. Traders are now targeting resistance at $3.459 and $3.489, with a major retracement level at $3.529 in focus.

At 16:14 GMT, Natural Gas Futures are trading $3.447, down $0.023 or -0.66%.

Can Natural Gas Hold Its Gains Despite Low Weather Demand?

Mild early-fall temperatures are weighing on national demand. According to NatGasWeather, the northern two-thirds of the U.S. are experiencing unseasonably warm conditions, with highs in the upper 60s to 80s. The South remains warmer, reaching into the 90s in some areas. While this setup limits Heating Degree Days, Cooling Degree Days are running slightly above average. Still, overall U.S. demand remains light for the first week of October.

However, demand is not quite as weak as models had indicated late last week, partially supporting the price recovery. Traders are pricing in a more balanced outlook, with short-covering likely contributing to the rally after several weeks of choppy trade.

Will the U.S. Government Shutdown Disrupt Energy Market Data?

A new risk emerged Wednesday as a partial U.S. government shutdown began, following a standoff between former President Trump’s allies and Senate Democrats. While the Energy Information Administration (EIA) is expected to release its weekly natural gas storage report on schedule, traders remain on alert for possible delays in upcoming data that could cloud market signals and create volatility.

In the meantime, traders are awaiting fresh EIA inventory data, after last week’s report showed a build of +75 Bcf — just above expectations but still slightly below the 5-year average. Inventories remain well supplied, sitting +6.1% above seasonal norms.

Is Colder Weather on the Horizon Enough to Sustain the Rally?

Weather models are starting to shift, with forecasts from Atmospheric G2 suggesting cooler trends in the West between October 6–10, and a broader cool risk developing nationwide for October 10–14. This potential boost to heating demand may offer further upside if confirmed.

Meanwhile, LNG exports remain strong, with net flows at 15.7 Bcf/day, up 7.8% week-on-week. U.S. dry gas production is robust, reaching 107.9 Bcf/day (+5.5% y/y), while demand was at 70.4 Bcf/day (-1.3% y/y). Active rig counts dipped by 1 to 117, though production remains near record highs.

Market Forecast: Bullish Momentum Building, But Weather Is a Wildcard

Technical strength and shifting mid-October forecasts suggest a bullish near-term bias. Prices have cleared key resistance, and traders are targeting the $3.489–$3.529 zone. However, with current demand still muted by warm weather and storage levels healthy, bulls will need confirmation from colder trends to sustain the upside. Until then, upside remains vulnerable to a if support at today’s 50-day moving average, currently at $3.294, fails.

More Information in our Economic Calendar.