Natural Gas News: Prices Slip Below Key Moving Average, Eyes on EIA Report Today

U.S. Natural Gas Futures Dip Ahead of EIA Storage Report

U.S. natural gas futures are trending lower on Thursday as traders await the Energy Information Administration’s (EIA) weekly storage report. After slipping below the 50-day moving average of $2.285, the market now hovers near critical support levels at $2.252 and $2.214. These pivots are likely to dictate short-term market direction leading into today’s close, particularly as traders digest storage data and supply-demand balances.

Adding to the market’s current volatility is a shift in the key resistance level. The main top has dropped from $2.482 to $2.436, making this the new threshold to watch. A break above this level could trigger a trend reversal, setting the next target at $2.757. Despite this potential, the front-month futures contract is down for the third consecutive session, weighed by changing autumn demand forecasts.

Weather and Demand Outlook

According to NatGasWeather, demand is expected to remain relatively low in the near term, with moderate-to-low levels over the next four days. Much of the western and northern U.S. is experiencing comfortable temperatures, with highs ranging from the 60s to 80s. Texas and the east-central U.S. remain hotter, with highs in the upper 80s to 90s. However, the heat in southern regions is expected to subside next week, further reducing national demand as most areas cool down.

Overall, national demand is predicted to stay low to very low, as milder weather across the majority of the country dampens the need for cooling. This weather pattern shift could provide temporary relief to already robust natural gas storage levels.

EIA Storage Report Expectations

Market focus remains on the EIA’s weekly storage report, with forecasts calling for a build of 53 to 57 billion cubic feet (Bcf). This would be lighter than the five-year average build of 80 Bcf, largely due to cooler-than-normal conditions in Texas and the eastern half of the U.S., balanced against hotter-than-normal weather in the West and Plains. NatGasWeather expects a slightly higher build of 58-59 Bcf, citing weaker cooling degree days (CDDs) and increased wind energy generation as factors.

Meanwhile, Dow Jones forecasts a 53 Bcf build, aligning with broader market estimates. A smaller-than-expected build could provide short-term support to prices, though traders remain cautious as demand fundamentals remain weak.

Market Forecast

Given the current technical setup and weather-related demand weakness, the outlook for natural gas remains bearish in the short term. Unless the EIA storage report surprises with a smaller-than-expected build, prices could continue to test lower support levels. A break below $2.214 could open the door to further downside, while a rally above $2.436 would signal a shift toward a more bullish trend. However, with mild weather and low demand forecasts, the market is likely to remain under pressure in the near term.