Natural Gas News: Market Eyes 50-Day Moving Average as Prices Slide

Natural Gas Futures Near Key Support as Demand Weakens

U.S. natural gas futures traded lower on Friday, nearing critical support at the 50-day moving average of $2.978. A rebound could spark technical buying, but a break below may drive prices toward the 200-day moving average at $2.694. With weather-driven demand set to decline, traders remain cautious about near-term price direction.

Will Warmer Weather Limit Upside Potential?

The National Weather Service forecasts a mild start to February, with highs in the 40s across the North and 70s in the South. While colder air is expected in the Upper Midwest and Northeast, overall heating demand remains lower than January’s deep freeze, which had pushed prices higher.

NatGasWeather predicts light demand over the next seven days, with only brief cold spells. Without sustained cold, natural gas bulls may struggle to regain control.

EIA Storage Report Signals Large Draw, but Market Focus Shifts

The EIA reported a 321 Bcf withdrawal for the week ending January 24, reflecting last week’s Arctic blast. This exceeded the five-year average draw of 187 Bcf but was largely in line with expectations.

Total working gas in storage now stands at 2,571 Bcf—144 Bcf below last year and 111 Bcf under the five-year average. While the storage deficit provides some support, traders are shifting focus to upcoming weather patterns, which appear less favorable for prices.

European Gas Prices Surge on Supply Concerns

European natural gas prices hit a 15-month high as inventories declined. The Dutch TTF benchmark rose 4.2% to 53.62 euros per megawatt hour on Friday, extending recent gains.

EU gas storage was 54.6% full—below the five-year average of 62%—with colder temperatures and reduced wind power generation increasing reliance on gas. While current levels are manageable, lower inventories could complicate summer restocking efforts, as EU nations must reach 90% capacity by November.

Additional supply risks persist, with Malaysian exports disrupted by flooding and Nigerian pipeline vandalism curbing shipments. As a result, Europe is expected to rely heavily on LNG imports in the coming months.

Market Outlook: Key Support in Focus

With milder weather ahead and demand slowing, natural gas futures face downside risk if the 50-day moving average fails to hold. A break below $2.978 could trigger further selling toward $2.694.

Storage deficits provide some underlying support, but unless colder weather returns, traders may remain cautious. The market is at a critical juncture, with price direction hinging on upcoming weather patterns and technical support levels.

More Information in our Economic Calendar.