Natural Gas News: Bearish Market Sentiment Builds as Mild Weather Lowers Demand

Will Mild Weather and High Storage Keep Natural Gas Prices Under Pressure?

U.S. natural gas futures fell on Wednesday, moving further away from the $3.050 resistance and approaching a critical support level at $2.825. As traders assess the impact of high storage and mild weather, this pivot point could shape the market’s short-term direction. A sustained drop below $2.825 could drive additional selling, targeting support levels between $2.769 and $2.748, while a bounce from this level might allow prices to retest recent weekly highs near $3.013.

Can Mixed Weather Forecasts Boost Demand Expectations?

Mild temperatures across much of the southern U.S. are expected to keep heating demand low through the week, with NatGasWeather forecasting “light to very light” demand over the next seven days. However, a potential cold system moving into the central and eastern U.S. from November 20-24 has caught traders’ attention, with some repositioning for increased demand in late November. While colder weather in the western and northern U.S. has yet to generate significant heating demand, any shift in this trend could quickly impact prices.

Will Conflicting Weather Models Add Volatility?

Diverging weather models are adding uncertainty to the market. The Global Forecast System (GFS) model projects a more intense cold period, estimating 10 more heating degree days (HDDs) than the European Center (EC) model in the 9-15 day outlook. If the EC model trends colder, it could increase short-covering and support higher prices. Conversely, if the GFS model moderates, demand expectations might ease, applying additional pressure to prices. This disparity in forecasts has traders looking closely for cues on heating demand heading into the winter season.

Can Key Technical Levels Provide Support for Prices?

Technical indicators suggest a bearish outlook as prices remain under pressure. A sustained move below the $2.825 level may open the door for additional downside, with sellers likely targeting Monday’s gap between $2.769 and $2.748. However, a reversal above $2.825 could attract buyers and prompt a rally toward $3.013, especially if weather or demand fundamentals strengthen.

Market Forecast: Will Bearish Sentiment Persist Without a Cold Snap?

Given high storage levels, mild near-term weather, and conflicting forecasts, U.S. natural gas futures have a bearish short-term outlook. Prices are likely to remain volatile, especially if weather data continues to fluctuate. A significant cold trend could help buoy prices, but absent this, the market may continue testing lower support levels in the coming days.