Natural Gas News: Will Reaction to $3.444 Trigger a Monday Gap Opening?

What Drove Natural Gas Volatility This Week?

Natural gas futures experienced sharp swings last week as technical pressures, storage data, and weather forecasts influenced sentiment. Prices initially climbed to $3.353, driven by colder weather projections and positioning ahead of contract expiries. However, momentum stalled below critical resistance at $3.647, triggering a sell-off to $3.175 before prices stabilized and moved higher for the week.

Last week, natural gas futures settled at $3.363, up $0.160 or +5.00%.

How Did EIA Storage Data Influence the Market?

The U.S. Energy Information Administration (EIA) reported a modest 2 Bcf draw from storage for the week ending November 22, falling short of expectations for a 3 Bcf decline. This was well below the five-year average draw of 30 Bcf for the same period, signaling ample supply. Storage levels remain 7.2% above seasonal norms, highlighting a well-supplied market. This bearish data contributed to downward pressure on prices midweek, dampening bullish sentiment despite colder weather in certain regions.

Will Winter Weather Boost Demand?

Colder temperatures across the Midwest supported regional heating demand, with lows ranging from the 10s to 30s Fahrenheit. NatGasWeather reported increased demand heading into the weekend as colder air pushed southward. However, early December forecasts show mixed signals, with mild conditions likely returning in key regions. This weather uncertainty has kept traders cautious.

In terms of fundamentals, U.S. lower-48 dry gas production was steady at 103.4 Bcf/day, slightly down year-on-year, while LNG exports held firm at 13.1 Bcf/day. Electricity generation rose 3.86% year-on-year, reflecting strong utility demand. These factors provided a stable demand backdrop despite the bearish influence of supply surpluses.

Will Key Technical Levels Shape the Market’s Next Move?

Heading into next week, traders will closely monitor resistance at $3.444. A breakout above this level could spark a rally toward $3.647–$3.713, contingent on colder weather and stronger heating demand. The latter price is a potential trigger point for an acceleration to the upside. However, failure to breach this resistance may lead to further declines, with support identified at $3.118, which could similarly act as a downside trigger.

Updated weather models and post-holiday trading activity will be pivotal in determining short-term price direction. If forecasts favor colder temperatures, a bullish scenario could unfold. Conversely, continued mild weather or bearish storage data may pressure prices lower.

What’s the Market Outlook?

The natural gas market remains in a neutral to bearish position, reflecting ample supply, mixed weather forecasts, and variable demand drivers. Heightened volatility is expected in the coming sessions, with price action likely to depend on whether key resistance or support levels are tested or broken. Traders should prepare for sharp moves as fresh data becomes available and the possibility of a gap higher or lower on Monday depending on weekend weather forecasts.

More Information in our Economic Calendar.