Natural Gas News: Market Eyes 200-Day Average as Cold Weather Forecast Drives Bulls

Natural Gas Futures Spike on LNG Strength, Cold Weather Signals

U.S. natural gas futures surged Friday, extending a rally that began earlier in the week, as record-high LNG feed gas demand and early December cold weather models outweighed otherwise bearish short-term forecasts. Prices punched through key technical levels during the morning session before pulling back modestly, signaling a possible trend shift for traders watching for a breakout.

At 16:34 GMT, December Natural Gas Futures are trading $4.081, up $0.125 or +3.16%.

Are Fundamentals Catching Up With Technical Breakouts?

Natural gas prices spiked to an intraday high of $4.157 early Friday, briefly surpassing the October 22 peak of $4.139 but stopping short of the October 2 high of $4.211.

This move followed Thursday’s 3.7% gain, with December Nymex futures closing at $3.959. Traders pointed to a strong move above the 50-day moving average ($3.884) as a technical trigger, while swing chart analysis reinforced a short-term uptrend.

Key resistance levels at $4.211 and the 200-day moving average at $4.462 are now in focus.

Is Weather Still a Bearish Anchor in the Near Term?

Despite recent price gains, near-term weather remains a drag. Forecasts through early November call for moderate to light heating demand, with much of the U.S. under seasonal or warmer-than-normal temperatures.

However, this is shifting. Forecasting firm Atmospheric G2 noted a cooler trend for the eastern U.S. between November 9–13, which could begin to translate into stronger residential and commercial demand.

What Role Is LNG Demand Playing in Price Support?

LNG feed gas flows hit a record 16.7 Bcf/day on Thursday, providing a major tailwind. While that’s just slightly down on a weekly basis, the consistency of strong export demand continues to tighten the balance sheet. Electricity demand also remains firm, with the Edison Electric Institute reporting a 1.9% year-over-year gain in U.S. output for the week ending October 25.

Does Supply Still Pose a Risk to the Bull Case?

Dry gas production remains a headwind. Thursday’s reading from BNEF put U.S. production at 107.1 Bcf/day — up 3.7% year-over-year and just below all-time highs. Inventories also remain comfortable.

The EIA’s weekly storage report showed a 74 Bcf build, in line with expectations but above the five-year average. Stocks are 4.6% above seasonal norms, reinforcing that the market is well-supplied for now.

Market Forecast: Bullish Bias Near-Term, but Production Risks Loom

The short-term outlook tilts bullish as technical momentum aligns with rising LNG demand and emerging cold risks in mid-November forecasts.

However, elevated production levels and a soft near-term weather setup cap upside potential.

Traders should watch for confirmation of colder trends and any signs of production slowing to validate further gains.

More Information in our Economic Calendar.