Natural Gas News: Forecast Turns Bearish as Warm Weather Dims Demand Outlook

Natural Gas Settles Lower Despite Bullish Storage Surprise

Natural gas futures ended the week on a weaker note, pressured by improving weather forecasts that are expected to dampen demand heading into late April. Despite a bullish miss on the U.S. Energy Information Administration (EIA) storage report, May futures slipped to a 2-1/2 month low on Thursday before recovering most of the session’s losses through short-covering. The contract settled at $3.295, down 0.06%.

On Thursday, U.S. Natural Gas Futures settled at $3.245, down $0.002 or -0.06%.

Warm Forecasts Undermine Short-Term Demand

The primary drag on prices came from updated weather projections. Atmospheric G2 reported warmer-than-normal conditions across the eastern two-thirds of the U.S. for April 22–26, reducing the need for heating demand. With storage builds now expected to accelerate, traders leaned bearish, even as technical indicators show the market holding above its 200-day moving average at $2.897.

Bullish Inventory Data Offers Temporary Support

The EIA reported a +16 Bcf injection for the week ended April 11, well below forecasts of +24 Bcf and the five-year average increase of +50 Bcf. While this bullish surprise triggered a round of short covering, it wasn’t enough to change the broader sentiment driven by warming temperatures. As of April 11, U.S. natural gas inventories were 20.9% below year-ago levels and 3.9% below the five-year average.

Production Stable, But Demand Picture Mixed

Lower-48 state dry gas production on Thursday reached 105.6 Bcf/day, up 5.4% year-over-year, while demand stood at 70.1 Bcf/day, up 2.2%. LNG flows to export terminals dropped to 15.5 Bcf/day, down 4.8% from the prior week. Electricity demand, however, remained supportive. The Edison Electric Institute reported a 6.4% year-over-year jump in power generation for the week ending April 12, potentially signaling stronger gas burn from utilities.

Market Forecast

Near-term pressure is expected to continue as traders respond to improving spring temperatures and the potential for stronger storage builds. Technically, the market remains in a downtrend, with the next key support at the January 31 bottom of $2.957. The 200-day moving average at $2.897 is a long-term floor to watch. Despite tight storage levels, bearish weather sentiment may cap rallies unless LNG exports rebound or weather models shift colder.

More Information in our Economic Calendar.