Natural Gas News: Futures Rally on Frigid Weather as Market Eyes 200-Day MA Breakout

Natural Gas Futures Surge as Winter Weather Grips Central U.S.

January natural gas futures climbed sharply on Friday, breaking above the 200-day moving average at $4.731 as frigid temperatures sweep across much of the country. The contract now eyes recent swing tops at $4.806 and $4.881, though traders will need sustained bullish drivers to breach those levels.

At 16:41 GMT, January Natural Gas Futures are trading $4.785, up $0.227 or +4.98%.

Cold Snap Fuels Demand Expectations

U.S. natural gas futures opened higher following the Thanksgiving break as winter conditions arrived in force. Dennis Kissler of BOK Financial noted that the central U.S. is experiencing its first truly frigid stretch of the season, with below-average temperatures expected to persist into the first week of December. The National Weather Service confirms this outlook, forecasting highs in the 20s and 30s across the Midwest and teens to 20s in portions of the northern Rockies and Plains through the weekend.

A major winter storm is currently affecting the northern Plains and Midwest, bringing 6-12+ inches of snow from eastern South Dakota through the Upper Midwest. Heavy lake-effect snow continues across the Great Lakes region, with storm totals reaching 1-2 feet in some areas. These conditions are supporting near-term heating demand expectations and underpinning bullish sentiment.

Storage Remains Comfortable Despite Weekly Draw

The EIA reported working gas in storage at 3,935 Bcf for the week ending November 21, representing a net decrease of 11 Bcf from the prior week. While the draw confirms seasonal consumption patterns are underway, inventory levels remain 160 Bcf—or 4.2%—above the five-year average of 3,775 Bcf. Stocks sit 32 Bcf below year-ago levels but remain comfortably within the five-year historical range.

Regionally, the East saw a 13 Bcf draw while the Midwest declined 9 Bcf. The South Central region bucked the trend with a 13 Bcf injection. The Mountain region held flat, and the Pacific posted a modest 3 Bcf withdrawal.

Will Weather Models Sustain the Rally?

Despite the current bullish setup, longer-range forecasts present a potential headwind. Kissler cautioned that weather models are showing less cold in extended outlooks, which could cap upside momentum if heating demand expectations moderate. LNG export demand and sustained cold weather remain the primary catalysts needed to push prices through overhead resistance.

The near-term bias tilts bullish as winter weather drives demand, but traders should remain alert to evolving weather forecasts. A sustained cold pattern could propel prices toward $4.806 and $4.881, while moderating temperatures may stall the advance given ample storage cushion.

More Information in our Economic Calendar.