Natural Gas News: Futures Hold Support as Traders Weigh Weather and Supply

Natural Gas Futures Hold Above Support as Traders Eye Production and Forecasts

U.S. natural gas futures are showing resilience early Tuesday following a technical pullback from Monday’s eight-month high. Despite a potentially bearish chart setup, buyers are stepping in near key support levels as the market weighs strong production data against a shifting weather outlook for mid-to-late November.

At 14:30 GMT, December Natural Gas Futures are trading $4.398, up $0.060 or +1.38%.

Will Strong Production Cap Further Gains?

Natural gas prices retreated Monday after spiking to their highest level since March. The initial rally was driven by colder weather forecasts, particularly for November 15–24, which are expected to boost heating demand. However, prices reversed course after news that U.S. dry gas production hit a record 111.0 Bcf/day — up more than 12% year-over-year.

This production surge adds weight to an already well-supplied market. The Baker Hughes rig count also confirmed growing output capacity, with active gas rigs rising to a 2.25-year high of 128. The EIA’s revised forecast now sees 2025 gas production at 107.14 Bcf/day, slightly above its previous estimate, suggesting the supply trend could persist.

Is Demand Growth Enough to Support Prices?

Despite the production pressure, demand metrics offer some support. Lower-48 gas consumption reached 94.7 Bcf/day on Monday, up 30% from a year ago, while LNG exports held steady at 18.0 Bcf/day. Electricity demand is also providing a modest floor, with U.S. output ticking up 0.05% year-over-year in the most recent week, and 2.89% higher over the past year.

Storage levels remain adequate, with U.S. inventories running 4.3% above their five-year average as of October 31. Europe’s storage, however, was reported at just 83% full — notably below the seasonal norm — leaving room for increased U.S. LNG demand if colder conditions persist globally.

Can Weather Trends Sustain Bullish Momentum?

The latest forecast from NatGasWeather shows cold conditions dominating much of the eastern U.S. through midweek, followed by a temporary warming trend. This easing in national demand may pressure prices short term unless forecasts turn colder again for early December.

Traders continue to align price action with 10- to 15-day forecasts, suggesting any upside follow-through will likely depend on confirmation of a colder pattern by late November.

Short-Term Outlook: Cautiously Bullish with Key Support in Focus

Although Monday’s reversal hints at near-term selling, Tuesday’s bounce signals underlying support from weather-driven demand and trader positioning. A sustained move above $4.452 would invalidate the reversal top and set the stage for another leg higher. However, failure to hold above $4.336 could open the door to deeper selling.

For now, the outlook leans cautiously bullish, with weather and production trends continuing to dictate near-term direction.

More Information in our Economic Calendar.