Sellers Overshot and Gas Bounced Without Help From Weather
Sellers pushed November natural gas futures under $3.00 Friday and ran out of room just ahead of a pair of main bottoms. Buyers stepped in there. The contract was back through the round number late in the session. I’d call it a trade off the September lows, not a new weather story.
Nothing on the weather map explains a sustained rally. Storage remains comfortable, the Energy Information Administration report wasn’t friendly enough to squeeze shorts and production is still elevated. The chart’s still pointed down too, with gas under its 50-day moving average.
At 18:09 GMT, November natural gas futures are trading at $3.026, up $0.059 or +1.99%. The contract traded from $2.912 to $3.028.
Daily November Natural Gas Futures Technical Analysis
November natural gas futures are trading higher late in the session on Friday. The market traded sharply lower earlier in the day, but turned around after touching an intraday low of $2.912. This was just ahead of a pair of main bottoms.
The main trend is down according to the daily swing chart. A trade through $2.902 will reaffirm the downtrend, while taking out $2.896 could lead to an even steeper decline. A trade through $3.395 will change the main trend to up.
Natural gas is currently in a position to post a closing price reversal bottom. If confirmed on Monday, it could start a two- to three-day counter-trend rally.
Overcoming the 50-day moving average could launch a short-covering rally.
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See all Natural Gas forecastsThe Storage Number Didn’t Bring Buyers In
Thursday’s EIA storage number was close to a wash. The 64 Bcf injection for the week ended September 25 ran one Bcf over the estimate and stayed under the five-year average build.
Buyers can live with a number like that. Shorts didn’t have to cover on it. Working gas stood at 3,415 Bcf, 2.4% above the five-year seasonal average. Inventories are also 4.1% below a year ago, but the market is heading toward winter with enough gas in the ground to wait for a real demand signal.
The Appalachian pipeline outage had November bid last week. Then the repair outlook came out and that premium was gone by Friday’s low. Nothing has replaced it.
So the front month is left with a mild forecast, elevated output and a storage cushion that hasn’t gone anywhere.
Shoulder-Season Weather Isn’t Burning Much Gas
NatGasWeather has the South warm to hot through October 7, with California pushing into the 100s. Everywhere else is mostly comfortable outside a few cooler northern spots.
Comfortable weather in October means low national demand. The California heat buys some regional power burn. It can’t carry the national balance with the rest of the country barely needing heat or air conditioning.
There are some model differences farther out. A cooler Midwest run can pull more heating degree days into the October 8 to 15 period. Shorts under $3.00 have to respect that. The cold still has to show up in the forecasts run after run before anyone builds a demand case on it.
After the shorts finish covering, this bounce is going to need colder weather to keep going.
Output Is Still High and LNG Isn’t Accelerating
Output is still running hot. Lower 48 dry gas production was near 110.9 Bcf per day Thursday, up 1.8% from a year earlier. Demand rose too, but cooling season is ending. The question is whether production slows before heating demand gets a chance to take over.
Not yet. The natural-gas-directed rig count dropped by two to 133 in the latest Baker Hughes report. That helps the supply argument at the margin. The count remains well above the year-ago level and near the upper end of its recent range.
LNG is still pulling a lot of gas, with feedgas near 18.1 Bcf per day Thursday. It’s easing off the prior week’s pace. Exports are putting a floor under natural gas without giving anyone a new reason to pay up for November.
The longer-term supply outlook is still heavy. The EIA sees dry gas production averaging a record 111.2 Bcf per day in 2026 and Lower 48 inventories ending October near 3,985 Bcf. Any weather rally has to fight that.
What to Watch
The weather models are the real catalyst over the weekend. Sellers have the October map, the storage cushion and the production numbers on their side. A colder Midwest pattern is the piece buyers don’t have yet.
The bias leans bearish. November natural gas futures are on the weak side of the 50-day moving average at $3.033 and the main trend is down on the swing chart. Friday’s low at $2.912 held just ahead of the main bottoms. Late in the session the contract came back through $3.00, setting up a potential closing price reversal bottom. Monday tells us whether it confirms. Above the market, short-sellers have the retracement levels between $3.087 and $3.350 to work with.
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