Natural Gas News: Bearish Inventory Report Challenges Bull Run Despite 585 Bcf Supply Deficit

Will Natural Gas Hold Key Support After Bearish Storage Report

U.S. natural gas futures are retreating for a second session on Friday as traders digest a weaker-than-expected storage report and fluctuating weather forecasts. Prices had recently surged to a multi-month high of $4.551 before retreating toward the pivotal $4.147 level. The market’s next move will likely hinge on whether this support holds or gives way to further declines.

At 13:29 GMT, Natural Gas Futures are trading $4.181, down $0.121 or -2.81%.

What’s Pressuring Prices?

Thursday’s EIA storage report showed a net withdrawal of 80 Bcf, falling short of expectations for a 92-94 Bcf draw. The bearish surprise stemmed partly from increased solar energy generation, which reduced gas demand for power generation. Total working gas now stands at 1,760 Bcf, 585 Bcf below last year’s levels and 224 Bcf under the five-year average. Despite the deficit, the miss reinforced near-term selling pressure.

Weather forecasts also suggest only moderate demand through the weekend, with alternating cold and mild periods across the U.S. While colder air persists in the northern states, highs in the 50s-80s across the South and East could limit heating demand. This shifting pattern has prevented a sustained bullish push despite underlying supply tightness.

Technical Levels to Watch

Natural gas is trading near the key pivot level of $4.147. Holding above this zone could trigger a rebound toward the resistance band between $4.442 and $4.714. However, if sellers push prices below $4.147, the next major support sits at $3.770, potentially opening the door to further downside.

Market Forecast

While storage deficits remain a bullish factor, the recent bearish storage surprise and mixed weather outlook have pressured prices. If the $4.147 pivot holds, a rebound could develop, but failure to sustain this level could drive prices toward $3.770. Traders should watch weather updates and production trends closely, as any fresh supply disruptions or stronger late-season cold could provide renewed support.

More Information in our Economic Calendar.