Natural Gas News: Milder Forecast and Storage Build Pressure Futures to End Week

Natural Gas Closes Lower Friday as Storage Surprise and Mild Weather Weigh on Sentiment

U.S. natural gas futures settled lower on Friday, retreating after a strong run earlier in the week. December futures ended the session at $4.566, down $0.080 or -1.72%, after failing to break above Thursday’s high at $4.688. While the broader trend remains constructive, Friday’s setback was driven by a bearish storage report and a notable shift in near-term weather forecasts.

Was the Storage Build the Key Catalyst Behind Friday’s Pullback?

The Energy Information Administration reported a storage build of +45 Bcf for the week ending November 7, well above the market consensus of +34 Bcf and the five-year average injection of +35 Bcf. The surprise build undercut bullish momentum and highlighted that inventories remain adequate heading into winter.

As of November 7, stocks were 0.3% below year-ago levels but 4.5% above the five-year average. The bearish report pushed prices below the 200-day moving average at $4.455, a key level that drew buyers late in the session. However, the rally attempt faded quickly, suggesting limited conviction from the bulls.

Do Warmer Weather Models Undermine Demand Expectations?

Updated forecasts added pressure, as traders digested milder temperature expectations for the back half of November. According to Atmospheric G2, the U.S. is expected to see above-normal temperatures from November 19–28, particularly across the central and western regions.

While brief cold shots may still develop in the East, the overall warm bias into late November is likely to reduce heating-related demand and delay any meaningful inventory draws. That’s a bearish near-term signal for a market that needs consistent cold to tighten the supply-demand balance.

Is Rising Production Still Outpacing Demand Growth?

Production remains near record highs. Dry gas output in the Lower 48 reached 109.9 Bcf/day on Friday, up 7.1% from a year ago. Demand, meanwhile, was 80.0 Bcf/day, down 5.5% year-over-year, according to BNEF.

LNG exports improved, rising 5.9% week-over-week to 17.7 Bcf/day, but haven’t been enough to offset domestic oversupply. Adding to the pressure, the EIA raised its 2025 output estimate by 1.0% to 107.67 Bcf/day. Although gas rig counts dipped slightly last week to 125, the pullback is minor and follows a multi-month climb.

Short-Term Outlook: Bearish Bias With Downside Risk Intensifying

Unless a sharp cold snap develops soon, the short-term outlook remains bearish. The failure to hold gains above $4.688 and the rejection at the 200-day moving average signal waning upside momentum. If prices slip back below that level, the door opens for a potential test of retracement levels near $4.220 and $4.142.

With high production, a bearish storage build, and milder weather dampening demand, the fundamental picture favors sellers in the near term. Bulls may step in near technical support, but without a shift in weather or a sharp drop in output, any rallies are likely to be short-lived.

More Information in our Economic Calendar.