Natural Gas News: Weather Outlook Hits Demand Forecast, Futures Press Lower

Natural Gas Slides into Weekend as Bulls Search for a Floor

U.S. natural gas futures are limping into the weekend, with prices stuck in a downward spiral as weather models flip warmer and the market shrugs off what would normally be bullish storage data.

With the front-month contract down more than $1 since last Friday, traders are watching for signs of a technical bounce near the October 29 low at $4.052 — but there’s not much else offering support heading into Friday’s close.

At 14:03 GMT, January Natural Gas Futures are trading $4.134, down $0.097 or -2.29%.

Will Warmer Forecasts Keep Pressure on Prices?

The short answer: probably. The market got hit hard Thursday as updated forecasts from Atmospheric G2 and NatGasWeather pointed to an “exceptionally warmer” pattern setting up for the December 16–25 stretch.

That shift slashed heating demand expectations just as prices were struggling to hold onto support. Even with colder systems moving through the Northeast and Midwest this weekend, the warm-up next week is expected to flip the overall demand tone from high to low — fast.

Thursday’s selloff came despite a stronger-than-expected -177 Bcf draw from storage, which beat the consensus call for -170 Bcf and more than doubled the five-year average for this week.

In most markets, that would’ve triggered a bounce. Not here. Traders brushed it off, focusing instead on the bigger bearish picture: supply remains strong, and the demand hit from mild December weather looms large.

Production Still Climbing, Offsetting Bullish Data

Supply isn’t cooperating with the bulls either. Dry gas production hit 112.4 Bcf/d on Thursday, up 8.3% year-over-year and brushing up against record levels. The EIA also nudged its 2025 production forecast higher to 107.74 Bcf/d, keeping the longer-term supply outlook flush.

While the Edison Electric Institute reported a 2.3% year-over-year rise in electricity demand for the week ending December 6, it’s not moving the needle enough to offset production gains. LNG feedgas flows were softer on the week, down 4% to 18 Bcf/d, which added another layer of softness to an already oversupplied tape.

Can Technical Support Hold — or Is There More Downside Ahead?

Technically, traders are eyeing the October 29 low of $4.052 as a key level. A bounce here isn’t off the table, especially with prices stretched and weekend profit-taking potentially coming into play. But reclaiming the 50-day moving average at $4.488 looks like a tall order unless there’s a meaningful shift in the weather narrative — and fast.

Short-Term Outlook: Bearish Unless Weather Turns

Unless cold weather makes an aggressive comeback in the next round of models, the path of least resistance remains lower. Fundamentals — strong production, weaker-than-expected LNG flows, and now bearish weather — are all stacked against the bulls. The only near-term reprieve would be a technical bounce or short-covering ahead of the weekend. Otherwise, traders may need to brace for more downside.

More Information in our Economic Calendar.