Natural Gas News: Futures Rebound Above 50-Day Average with Weather Forecasts in Spotlight

Natural Gas Prices Test Support as Traders Weigh Weather-Driven Bounce Against Bearish Fundamentals

U.S. natural gas futures opened the week with modest gains, extending Friday’s bounce off a successful test of a short-term support zone. After briefly dropping to $3.200 late last week, futures reversed higher and are now testing key resistance levels, driven by a modest shift in near-term weather forecasts. However, strong bearish fundamentals—surging production and above-average storage—continue to cap upside potential.

At 12:28 GMT, Natural Gas Futures are trading $3.272, down $0.032 or -0.97%.

Is Weather Enough to Fuel a Sustainable Rally?

Early-week strength in gas prices appears tied to weekend weather updates showing a short-term bump in heating demand. According to NatGasWeather, colder air will move through the northern U.S. through October 29, though overall demand is expected to remain light to moderate due to milder conditions across the South.

The brief cold snap follows last week’s weather-driven rally, which peaked at $3.572 before retreating under pressure from a warming outlook into early November. Traders should treat weather models cautiously as forecast consistency has been lacking.

Storage and Supply Data Continue to Pressure the Market

Fundamentals remain heavy. The latest EIA report showed a larger-than-expected 87 Bcf injection for the week ending October 17, pushing storage levels 4.5% above seasonal norms. Inventories are also up 0.6% year-over-year. At the same time, production continues to break records, with lower-48 output hitting 108.5 Bcf/day on Friday, up 5.5% from last year. The EIA’s forecast for 2025—107.14 Bcf/day—underscores the ongoing supply-heavy environment, adding further pressure on any weather-led upside.

Are Demand Channels Offering Any Relief?

LNG exports and power generation demand have provided some support but remain insufficient to flip sentiment. LNG exports held firm at 16.6 Bcf/day last week, and pipeline flows to Mexico stayed strong. Meanwhile, electricity output rose 4.0% year-over-year, driven partly by gas-fired generation. Still, demand growth is being outpaced by supply gains, keeping sellers in control near key resistance levels.

Can Bulls Clear Technical Hurdles or Is This Just a Bounce?

Traders are watching resistance at $3.386 and $3.572 closely. A sustained move above $3.572 could open the door toward $3.823, but failure at $3.386 would signal a short-covering bounce rather than a trend reversal. Support between $3.152 and $3.200 remains critical; a break below could trigger a sharp sell-off.

Short-Term Forecast: Bearish Below Resistance

Despite today’s early strength, the broader setup leans bearish. High production, strong storage, and inconsistent weather support suggest that upside will be challenged. Unless colder trends solidify, sellers are expected to defend resistance aggressively, keeping natural gas futures under pressure heading into November.

More Information in our Economic Calendar.