Natural Gas News: Frigid Weather Fuels Demand—Can Prices Break $3.766 Resistance?

Natural Gas Prices Hold Steady Below Key Resistance

Natural gas prices are hovering just below the $3.766 pivot on Thursday, maintaining stability as traders await further market signals. This key level is acting as a critical inflection point, with sustained movement above it potentially triggering an upside rally toward last week’s high of $4.201. Conversely, a failure to breach the level could lead to a test of the major support zone between $3.391 and $3.197.

At 14:20 GMT, Natural Gas futures are trading at $3.668, up $0.017 or +0.47%.

Colder Weather Boosting Demand

According to NatGasWeather, high to very high demand for natural gas is expected over the next seven days due to colder-than-normal temperatures across much of the interior United States. Lows are projected in the range of -10°F to 20°F, while regions in Texas and the South will also experience chilly conditions with lows between 10°F and 30°F.

Temperatures will moderate slightly by late this weekend, but another frigid system is forecast to move in next week, ensuring continued strong heating demand. The West Coast remains the exception, with milder weather and highs ranging from the 40s to 70s.

EIA Storage Report In Line With Expectations

The U.S. Energy Information Administration (EIA) reported a 40 Bcf withdrawal from working gas in storage for the week ending January 3, 2025. This was in line with market expectations of a 39 Bcf draw. Current storage levels stand at 3,373 Bcf, slightly below the 3,376 Bcf recorded at this time last year but 207 Bcf above the five-year average of 3,166 Bcf. Total working gas remains comfortably within the five-year historical range.

Price Movement Hinges on EIA Data and Resistance Break

Despite robust demand and expectations of larger storage withdrawals in upcoming reports, natural gas futures have struggled to clear the $3.766 resistance level.

Traders appear cautious, awaiting confirmation of stronger fundamentals before committing to upward momentum. A successful break above $3.766 could lead to a rally targeting $4.201. However, failure to do so increases the likelihood of prices retreating to support levels at $3.391 and $3.197.

The market remains tightly balanced, with weather-driven demand and storage data expected to steer the direction in the near term.

More Information in our Economic Calendar.