Natural Gas News: Counter-Trend Support Base Challenges Bearish Market Sentiment

U.S. Natural Gas Futures Aim to Close Higher Amid Mixed Fundamentals

U.S. natural gas futures held stable on Friday, poised to end the week higher as traders focused on establishing a support range between $2.514 and $2.818. The market faces a pivotal technical level at $2.825, where a breakout would signal a potential continuation of the short-covering rally that started on Monday after prices dipped to $2.514—a multi-month low. A sustained breakout above this pivot could target resistance levels in the $3.044 to $3.050 range.

Mixed Fundamentals Pressuring Prices

Natural gas futures saw limited movement early Friday as traders weighed opposing factors. Unseasonably warm temperatures across most of the U.S. have led to below-average consumption, weakening demand for natural gas to power furnaces. According to NatGasWeather, “warmer-than-normal temperatures” are expected to persist for several days, reducing the need for heating. However, isolated cooling systems across the central and western regions could provide localized demand support.

Temperatures are forecasted to remain mild to warm across much of the southern and eastern U.S., with highs ranging from the 60s to 80s Fahrenheit, while parts of New England and the Upper Great Lakes could experience slightly cooler conditions. Overall, demand is expected to remain light to very light this week, keeping a cap on any substantial price increases.

Storage Build Exceeds Expectations

On Thursday, the U.S. Energy Information Administration (EIA) reported a weekly storage increase of 69 billion cubic feet (Bcf), exceeding market expectations of a 64-66 Bcf build.

This larger-than-expected injection brings total working gas in storage to 3,932 Bcf as of November 1, positioning current stocks 157 Bcf above last year’s levels and 215 Bcf above the five-year average of 3,717 Bcf.

The increase, coupled with stronger-than-average wind energy output last week, adds to the already robust inventory levels, signaling ample supply ahead of the winter season.

With total storage now exceeding the five-year historical range, the data reinforces bearish pressure on prices as ample supply could offset any upcoming cold weather-related demand.

Market Forecast: Neutral to Bearish Near-Term

While the technical setup suggests potential for a short-term rally above $2.825, market fundamentals are expected to keep upward momentum in check. Warmer-than-usual temperatures and elevated storage levels are likely to prevent any sustained bullish run unless colder weather patterns emerge. For now, the outlook for natural gas futures remains neutral to bearish, with resistance at $3.050 as the next level to watch if prices break above the $2.825 pivot.