Natural Gas News: Will Warm Weather Keep Pressure on Futures This Week?

Natural Gas Tanks 22% as Warm Weather Kills the Rally

That escalated fast. January natural gas settled at $4.113 on Friday, down $1.176 or 22.23% on the week. The entire November rally is gone, and the market’s heading into late December with one big question: where’s the cold?

Forecasts Flipped — and So Did Sentiment

The weather trade fell apart early in the week. European models turned warmer for the December 16–25 stretch, and that was all it took. Traders bailed fast, especially with bullish positions stacked after last week’s cold surge and breakout above $5.

Buyers had been leaning hard on extended cold to keep the move alive. Instead, we got seasonal-to-mild in the extended window, and the bid dried up almost immediately.

Storage Data Was Strong — and Still Got Faded

The EIA reported a -177 Bcf draw — solid number, beat the five-year average, even topped most forecasts. Normally, that kind of print would trigger at least a short-term bounce. But not this time.

Storage is still 2.8% above seasonal norms, and with Europe sitting on decent inventory, traders looked past the draw. It’s all about the forward curve right now — and with warmer models dominating, the print just didn’t matter.

Production’s Still Too High for Comfort

On the supply side, there’s just no relief. U.S. dry gas output hit 112.5 Bcf/d, up 7.1% year-over-year. LNG flows dipped slightly to 18.1 Bcf/d, and power demand ticked higher — but none of it was enough to tighten things up.

If anything, the mild weather makes production look even heavier. Bulls are losing the narrative, and sellers are pressing every failed rally.

The Market Just Lost the Trend

From a weekly technical standpoint, the damage is done. Monday’s gap lower kicked off the slide, and once price broke below the 52-week moving average at $4.953 and the 50% retracement at $4.705, the floodgates opened. The October bottom at $3.913 is back on the radar — and unless the models flip colder fast, buyers don’t have much to lean on.

Bottom Line: Bears in Control Unless Cold Comes Back

The setup is clean. Warm weather, oversupply, and broken weekly support — the market’s not bouncing unless something changes fast. A colder shift in the next set of models could spark some short-covering, but without it, traders are going to keep leaning short. The $3.913 floor is in play. And if that cracks? Bulls might need to get out of the way.

More Information in our Economic Calendar.