Natural Gas News: Futures Slip as 7-15 Day Weather Forecast Eases Demand

US Natural Gas Prices Drop on Bearish Weather Forecast

US natural gas prices tumbled on Wednesday, reacting to a weak weather outlook for the upcoming 7-15 day period. Prices failed to surpass resistance at the 50-day moving average, leading to a significant decline. Currently, traders are focusing on two key price levels—minor bottoms at $2.403 and $2.305—which are the final barriers before a potential drop to the main support level of $2.201.

At 13:03 GMT, Natural Gas Futures are trading $2.434, down $0.064 or -2.56%.

Technical Pressure Intensifies

Natural gas prices are under increasing technical pressure after breaching a critical retracement zone between $2.510 and $2.610. The failure to hold above these levels has accelerated selling momentum, particularly as traders monitor weather forecasts that lack any substantial cold or heat over the next two weeks. The short-term technical outlook remains bearish unless the market sees a sustained recovery above the 50-day moving average.

Additionally, technical traders are closely watching $2.403 and $2.305 as key supports. A break below these could signal further downside, likely pushing prices toward the main bottom at $2.201.

Mild Weather Weakens Demand Outlook

NatGasWeather reported that national demand would remain relatively strong for the next couple of days as a cold system lingers over the Midwest and Northeast. This system is driving temperatures down to highs in the 40s-50s and lows in the 20s-30s, boosting short-term demand. However, beyond this, the forecast shows milder conditions, particularly in the 7-15 day range, with no extreme weather predicted across much of the country.

By mid-October, demand is expected to taper off as milder temperatures cover most regions, with highs ranging from the 60s to 80s across the US. Texas and the Southwest, previously experiencing higher temperatures, will cool down as well, further reducing overall demand.

EIA Weekly Storage Report in Focus

Market participants are also looking ahead to Thursday’s EIA Weekly Storage Report. Any surprise in the storage data could influence prices, but expectations lean towards a bearish outcome due to weakening demand projections. If storage levels come in higher than expected, it may put further pressure on prices in the near term.

Traders are looking for a build of 53 to 90 Bcf. Last year’s weekly change was 93 Bcf. The 5-year average weekly change is 89 Bcf.

Market Forecast

With the 7-15 day weather forecast failing to indicate significant temperature swings, the outlook for US natural gas prices remains bearish. The market is likely to test support at $2.403 and $2.305, and a break below these levels could see a further decline toward the key $2.201 bottom. Any upside will likely depend on unforeseen weather changes or a surprise in the upcoming EIA storage report. Traders should prepare for potential volatility as these factors unfold.