Natural Gas News: Futures Surge Past 50-Day Average Amid Strong Heating Demand

Futures Surge as Colder Weather Drives Heating Demand

U.S. natural gas futures rallied sharply on Wednesday, extending their move above the critical 50-day moving average at $3.102. Prices are also trading well above the retracement zone between $3.118 and $2.993, a key support area that halted last week’s declines.

This bullish momentum positions the market to challenge the 200-day moving average at $3.379. Breaking this resistance level would indicate stronger buying pressure, with $3.444 emerging as the next target. A close above the 200-day average would also pivot market focus toward a longer-term upward trend.

At 15:22 GMT, Natural Gas futures are trading $3.325, up $0.162 or +5.12%.

Cold Front Spurs Heating Demand

The rally aligns with colder weather sweeping across the Midwest and Northeast. Overnight forecasts trended colder, boosting near-term demand for natural gas. According to EBW Analytics Group, daily heating demand is expected to surge by 17 Bcf/d from Tuesday to Thursday, driven by a strong cold front.

Eli Rubin, senior analyst at EBW, noted that liquefied natural gas (LNG) feed gas deliveries have risen by 1.2 Bcf/d since Monday as Gulf Coast fog dissipated. Simultaneously, daily production levels are edging lower, adding support to prices.

Market Rebalancing After Volatile November

Natural gas prices are stabilizing after November’s price spike and subsequent pullback. The Nymex front-month contract has repeatedly found support near $3/MMBtu, as bulls defend this key psychological level. However, Rubin cautioned that an expected drop in heating demand next week could create significant price swings across regional markets, potentially impacting futures.

Weather Outlook: Short-Term Strength, Long-Term Uncertainty

NatGasWeather forecasts colder temperatures across the Midwest and Northeast through Saturday, with lows ranging from -0°F to 20°F. This frosty pattern will drive strong national demand in the short term. However, temperatures for Dec. 15-20 are expected to moderate unless colder trends emerge, potentially limiting the scope of a sustained rally.

Market Forecast: Cautiously Bullish

The combination of technical strength, rising heating demand, and increased LNG exports supports a cautiously bullish outlook for natural gas in the short term. Traders will closely monitor next week’s weather patterns and production data to gauge whether the rally has staying power.

More Information in our Economic Calendar.