U.S. natural gas kicks off the Friday session with storage above the five-year average but below last year. A new EIA price outlook and fresh weather forecast point to warmth across most of the country next week.
Latest Storage
The latest observed storage reading is still the EIA November 5 report for the week ending October 30. Working gas in the lower 48 stood at 3,801 billion cubic feet after an injection of 77 billion cubic feet. Stocks were 109 billion cubic feet, or 2.8%, below last year’s levels but 54 billion cubic feet, or 1.4%, above the average between 2021 and 2025.
The East added 13 billion cubic feet to 926 billion cubic feet, and the Midwest added 23 billion cubic feet to 1,111 billion cubic feet. South Central stocks rose 40 billion cubic feet to 1,208 billion cubic feet but remained 6.6% below the same week last year and 1.1% below the five-year average. South Central includes storage near Gulf Coast supplies and LNG export infrastructure, so a regional deficit can matter even while the national total is slightly above normal.
The EIA’s November 10 Short-Term Energy Outlook lowered its Henry Hub annual average forecast to $3.37 per million BTU for 2026 and $2.88 for next year, from $3.48 and $3.16 in the previous forecast. These are projections, not spot prices. EIA’s November forecast expects U.S. liquefied natural gas exports to increase from 18 billion cubic feet per day in 2026 to 19 billion cubic feet per day in 2027, while domestic natural gas’ share of power generation is projected at 40% this year and 39% next year. All of this information was finalized November 5, so it doesn’t incorporate any events that we’ve seen since then.
If Warmth Continues, It Does Provide a Little Bit of a Drag on the Market
NOAA’s Climate Prediction Center discussion issued yesterday gives the latest forecasts available. Its 6-10 day outlook for November 18-22 favors above-normal temperatures across most of the United States, with probabilities above 80% across portions of the central and eastern states. The accompanying 8-14 day outlook for November 20-26 also favors above-normal temperatures for much of the country. These are probabilistic outlooks, not actual observed measurements, though.
Natural Gas Price Forecast
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See all Natural Gas forecastsThe EIA storage report covering the week ending November 6 is scheduled for today at 10:30 a.m. Eastern Standard Time. It will test whether or not the injection pace continued after the 77 billion cubic feet build that we had seen the previous week.
Fundamentals Are Balanced
The fundamental picture is somewhat balanced. National stocks are slightly above normal, and forecasts are warm in some of the key regions, but inventories trail last year and South Central remains below its seasonal benchmark. A colder revision or smaller-than-expected injection could strengthen the bullish case. Keep in mind that the handful of areas that are demanding more heat at the moment still don’t include major metropolitan areas, but as that shifts, it could end up being a significant driver of price to the upside.
Technical Analysis
The natural gas market is one that I am looking to buy dips in, as I don’t like shorting the December contract. However, this is a market that is also waiting to see even colder temperatures in places like New York, Boston, etc. Buying dips for short-term trades remains the plan for me.
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