U.S. natural gas futures are holding firm on Thursday as traders await the latest EIA storage report, following a sharp three-day rally that lifted prices above the 50-day moving average. That momentum carried November contracts to $3.572 earlier in the week—just shy of the October 2 high—but recent gains have been tempered by warmer weather forecasts and expectations of a larger-than-average storage build.
At 11:44 GMT, Natural Gas Futures are trading $3.462, up $0.012 or +0.35%.
Natural gas futures pulled back on Wednesday after updated weather models pointed to above-average temperatures across the U.S. from November 1–5. Atmospheric G2 noted that this shift should lower short-term heating demand, triggering long liquidation after prices briefly touched a three-week high.
Adding pressure, the market is anticipating a storage build of +78 to +83 Bcf for the week ended October 17—above the five-year average of +77 Bcf. If confirmed, this would reinforce concerns of strong supply entering the shoulder season. Last week’s EIA report showed a build of +80 Bcf, which undershot expectations, giving prices a short-lived lift.
Fundamentals remain tilted bearish with production at near-record highs. BNEF data showed lower-48 dry gas production at 107.1 Bcf/day on Wednesday, up 3.9% year-over-year. LNG export flows held firm at 16.4 Bcf/day, while pipeline exports to Mexico reached a record 7.5 Bcf/day in May.
The EIA recently raised its 2025 U.S. production forecast to 107.14 Bcf/day, while active gas rigs stand just shy of a two-year high at 121. With inventories already 4.3% above their five-year seasonal average and only marginally higher year-on-year, supply remains adequate heading into winter.
One supportive datapoint came from the Edison Electric Institute, which reported a 4.0% year-on-year increase in U.S. electricity output for the week ending October 18. However, with gas demand at 73.8 Bcf/day and warm forecasts in focus, it may not be enough to counter bearish storage and production trends.
The setup heading into today’s EIA release is finely balanced.
A lower-than-expected build, especially if paired with colder forecast revisions, could trigger a breakout above this week’s $3.572 high and open the path toward the long-term pivot at $3.823. A confirmed move through that level may extend the rally toward the 200-day moving average at $4.135.
Conversely, a bearish EIA print combined with reinforced mild temperatures likely pressures prices back toward the 50-day moving average at $3.252. A break below there could invite deeper liquidation.
With both fundamental and technical drivers in play, the short-term outlook is neutral-to-bullish, but conviction depends on how today’s data resolves. Traders should expect heightened volatility and position accordingly.
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James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.