Natural Gas News: December Expiry Spurs Volatility, Midwest Cold Front Key for Demand

Futures Edge Higher Ahead of Contract Expiry and Cold Weather Expectations

U.S. natural gas futures are trading higher on Tuesday as the December contract approaches expiration, supported by expectations of colder weather in key regions. Spot prices have also climbed nationwide as market participants position for a potential increase in heating demand.

At 12:36 GMT, Natural Gas futures are trading $3.491, up $0.048 or +1.39%.

Key Technical Levels in Focus

Natural gas futures are currently trading at $3.497, above the pivotal 50% retracement level of $3.444, which serves as immediate support. A sustained move above this level signals the presence of buyers and could generate upside momentum. If this occurs, traders may target last week’s high of $3.637 and the October peak at $3.647. Breaking above these levels with strong volume could pave the way for a rally toward $4.30, contingent on continued cold weather and elevated demand.

Conversely, a move below $3.444 would suggest weakness, bringing the 200-day moving average at $3.402 into focus as the next support level. Failure to hold above this indicator could lead to sharper declines, with the 50-day moving average at $3.143 and a retracement zone between $3.118 and $2.993 as subsequent downside targets.

Weather Models Diverge, but Midwest Cold to Drive Demand

According to NatGasWeather, colder trends in the ECMWF model for the 8–15 day period show reinforcing cold air across the Midwest and East from late this week through early December, suggesting strong national demand. However, the GFS model is less bullish for this timeframe, creating some uncertainty about the intensity of the cold snap.

Short-term forecasts indicate a frosty cold front sweeping across the Midwest with highs in the 10s to 30s early this week. By late week, colder air is expected to extend south and east, driving strong heating demand. The East and South will see milder conditions early this week, with highs ranging from the mid-50s to 80s, before temperatures drop.

Market Outlook

With volatility expected as December contracts roll off, traders should monitor weather updates and technical levels closely. If cold weather forecasts materialize and prices hold above $3.444, a bullish rally targeting $3.647 and potentially $4.30 could unfold. However, failure to sustain current levels may lead to bearish momentum, with key support zones under $3.40 likely to be tested.

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