Natural Gas News: Prices Eye $5.341 Resistance as Weather Drives Today’s Market Action

Natural Gas Edges Higher as Cold Weather Sets the Tone

Natural gas futures are firming up again on Friday, with the January contract eyeing a potential breakout toward the $5.341 level. The move comes as colder-than-normal weather forecasts tighten the near-term outlook, injecting volatility back into a market that had already been heating up this week. Traders now face a classic setup: buy into strength or wait for a pullback. Either way, risk is on the table.

At 13:17 GMT, January Natural Gas Futures are trading $5.225, up $0.162 or +3.20%.

Is the Cold Snap Enough to Sustain the Rally?

Prices climbed 1.36% on Thursday, recovering from early session losses to hit their highest level in nearly three years. The driver? Fresh forecasts from Atmospheric G2 showing sub-normal temperatures across the eastern U.S. from December 9–13. That’s pushing expectations for stronger heating demand, a key seasonal tailwind. Traders have seen this pattern before — winter risk premium creeping in fast, and positioning tends to follow.

Still, not all the data was bullish. The EIA reported a storage draw of just 12 bcf for the week ending November 28, well below expectations for an 18 bcf drop. The five-year average draw for this week is 43 bcf. That’s a miss, and it shows inventories remain comfortable — now 5.1% above the five-year average, even if they’re slightly below last year’s levels. Bottom line: storage isn’t screaming scarcity.

Strong Demand, But Supply Isn’t Backing Off

On the production front, dry gas output hit 111.5 bcf/day on Thursday, up more than 6% from a year ago. And despite the cold snap, supply hasn’t flinched. In fact, active rigs climbed to 130 last week, a 2.25-year high. That supply confidence might cap upside in the near term unless weather turns severe.

Demand is holding up. Thursday’s lower-48 consumption hit 118.1 bcf/day — a 12% jump year-over-year. Meanwhile, LNG flows ticked down slightly to 17.7 bcf/day, but that’s still a historically strong level. Power burn is also supportive: U.S. electricity output rose 2.1% y/y last week, with a 3% gain over the trailing 12 months. Traders are watching for whether this demand can keep pace with elevated production — or if another storage miss cools the rally.

Can Prices Push Through Resistance — or Will the Dip Get Bought?

The technicals are lining up. Resistance sits at $5.341, and price action is flirting with that breakout zone. If bulls punch through, we could see another leg higher — but it’s not a sure thing. On the downside, key support comes in at $4.953, with the 200-day moving average just below at $4.731. That dip zone could attract buyers if the rally stalls or if weather models shift.

Short-Term Outlook: Bullish, With a Weather-Driven Caveat

The market remains bullish short-term, but this is a weather trade — and weather trades cut both ways. If cold holds, momentum likely continues. But any moderation in the forecast, or another soft EIA print, could open the door for profit-taking. Traders should stay nimble. This isn’t a time to get complacent.

More Information in our Economic Calendar.