Natural Gas News: Traders Watch $2.947 Pivot as EIA Report Set to Test Market Sentiment

Natural Gas Futures Climb Ahead of EIA Report as Traders Eye Key Resistance

U.S. natural gas futures edged higher early Thursday, with the October Nymex contract trading near a one-week high ahead of the weekly EIA storage report. Prices bounced off Tuesday’s $2.772 low—its weakest print since late August—rallying to $2.963 and positioning just below key resistance at $2.947.

Traders are eyeing a breakout toward the 50-day moving average at $3.050, though upside momentum remains tempered by ample supply and soft near-term demand.

At 13:51 GMT, Natural Gas Futures are trading $2.936, up $0.078 or +2.73%.

Can Short-Covering Outweigh Pressure from High Inventories and Production?

Short-covering and technical buying have fueled the latest recovery, as the prompt-month contract trades within a tight retracement zone of $2.887 to $2.947. A clean move above the upper boundary could unlock buying toward the 50-day average. However, U.S. inventories remain a bearish anchor.

The EIA is expected to report a +74 Bcf injection for the week ended September 19, just under the five-year norm of +76 Bcf. Last week’s larger-than-expected +90 Bcf build highlighted the market’s ongoing oversupply, with stocks running +6.3% above their five-year seasonal average.

Does Warm Weather Still Support Late-Season Cooling Demand?

Weather forecasts offer modest support. Atmospheric G2 projected warmer trends across the central and northern U.S. from late September into early October. With highs in the 80s and 90s across the southern tier and some lingering warmth in the north, air-conditioning demand could persist a bit longer than usual. Still, overall national demand is projected to be low to very low through September 30, according to NatGasWeather, limiting any sustainable upside from weather alone.

Is High Output Capping Upside Momentum?

Supply-side factors remain dominant. Lower-48 dry gas production was estimated at 108.0 Bcf/day on Wednesday, up +5.6% year-on-year and near record highs. Meanwhile, LNG feedgas flows slipped slightly to 15.5 Bcf/day.

Onshore drilling activity also signals robust production, with 118 active rigs as of last week—just below the 2-year peak. The EIA recently raised its 2025 production forecast to 106.63 Bcf/day, adding to long-term pressure on prices.

Outlook: Cautiously Bearish Below $2.947 Resistance

Unless Thursday’s EIA report significantly surprises to the downside, upside may be limited. The market needs a decisive break above $2.947 to retest $3.050, but current fundamentals—robust supply, soft demand, and near-average storage builds—tilt the bias bearish in the near term.

A failure to hold $2.887 could quickly shift focus back to support at $2.772. Traders should watch for a short-term fade unless strong bullish momentum emerges post-report.

More Information in our Economic Calendar.