Natural Gas News: Futures Face Headwinds from Weather and Inventory Trends

Natural Gas Trading Flat During Thanksgiving Holiday

On Thursday, limited electronic trading for Nymex natural gas futures showed a flat market as the Thanksgiving holiday effectively paused activity. Traders remained cautious, digesting Wednesday’s bearish storage data and monitoring potential weather changes for early December. With U.S. markets largely inactive, the focus turned to forecasts and supply-demand fundamentals.

At 12:13 GMT, Natural Gas futures are trading $3.207, unchanged.

EIA Reports Smaller-than-Expected Draw

On Wednesday, the U.S. Energy Information Administration (EIA) reported a modest 2 Bcf withdrawal from natural gas inventories for the week ending November 22. This was below market expectations of a 3 Bcf draw and well under the five-year average draw of 30 Bcf for this time of year.

As of November 22, natural gas stocks stand 7.2% above their five-year seasonal average, reflecting ample supply levels. This weaker-than-expected draw contributed to lower prices during the last active trading session.

Weather and Demand Factors in Focus

Cold air continues to dominate the Midwest, driving heating demand with temperatures ranging from the 10s to 30s Fahrenheit. However, milder conditions in the Northeast and southern U.S. are expected to temper overall demand.

NatGasWeather projects increased heating needs through the weekend as colder air expands southward but notes that early December may see a return to milder conditions, potentially reducing consumption.

Production and LNG Export Activity Steady

Lower-48 dry gas production was reported at 103.4 Bcf/day, a 1.5% year-on-year decline. LNG export flows remained stable at 13.1 Bcf/day, reflecting a slight 0.8% week-on-week dip. Meanwhile, domestic electricity output rose, with total U.S. generation for the week ending November 23 up 3.86% year-on-year, supporting steady demand from utility providers.

Market Outlook

With holiday trading volumes subdued and mild weather anticipated for December, natural gas prices are under bearish pressure in the near term.

Resistance is seen at $3.444, with key support around $3.145 to $3.118. Post-holiday trading sessions and updated weather forecasts will provide clearer price signals heading into next week.

More Information in our Economic Calendar.