Natural Gas News: Prices Slide as Bearish Market Sentiment Persists, Key Support in Focus

U.S. Natural Gas Prices Edge Lower, Bearish Sentiment Persists

U.S. natural gas futures traded lower on Monday, continuing last week’s downtrend as bearish pressure dominates the market. After testing the 50-day moving average at $2.556, prices face a crucial level that could either attract new buyers or lead to further declines. Market participants are closely watching this indicator to determine whether prices will retest resistance at $2.610, $2.662, and $2.711, or if a drop toward $2.403 is imminent. The main trend remains bearish, driven by both weather and supply factors.

At 12:58 GMT, Natural Gas Futures are trading $2.559, down $0.073 or -2.77%.

Mild Weather Limits Demand

Last Thursday’s forecast by NatGasWeather initially predicted rising demand; however, today’s price action suggests this outlook may have shifted. From October 10 to 16, much of the U.S. experienced mild temperatures, with highs in the 60s to 80s across most regions, and the Northeast seeing cooler temperatures of 40s to 50s. Hurricane Milton, which impacted Florida earlier, has now moved offshore, leaving behind mild weather and low natural gas demand through the weekend. However, forecasts call for a cold front next week, which could boost demand in the Midwest and Northeast.

Hurricane Milton Disrupts Natural Gas Markets

Hurricane Milton was a key factor in last week’s market movements, especially early in the week when it caused significant demand destruction. As the Category 4 storm approached Florida, nearly 3.4 million homes and businesses lost power, sharply reducing natural gas consumption for power generation. Florida is a major consumer of natural gas, and these outages contributed to a steep decline in prices. Although the storm largely missed key gas production areas in the Gulf of Mexico, the loss of demand weighed heavily on the market.

Late Week Stabilization on Cooler Forecasts

While early week losses were driven by the hurricane, forecasts of cooler temperatures late last week helped stabilize prices. Traders engaged in short-covering and profit-taking on Friday as a cold shot was expected to hit the Midwest and Northeast, pushing prices modestly higher. This shift in weather patterns hinted at increased heating demand, providing some support for the market heading into the weekend.

Storage Report Adds Some Support

The U.S. Energy Information Administration (EIA) reported a storage injection of 82 Bcf, bringing total working gas in storage to 3,629 Bcf. This is 124 Bcf higher than a year ago and 176 Bcf above the five-year average. Although these storage levels remain comfortable ahead of the winter season, the smaller-than-expected injection lent some support to prices, preventing further declines.

Market Forecast

Looking ahead, the market faces a mixed outlook. A cold front forecasted for the Midwest and Northeast could provide upward pressure on natural gas prices as heating demand rises. However, the lingering impact of demand destruction from Hurricane Milton and the potential for continued mild weather elsewhere could limit gains.

If prices manage to hold above the key pivot level of $2.610, a slight bullish shift may occur. However, a sustained break below this level could lead to a deeper bearish move, with the next target around $2.403.