As of November 7, stocks were 0.3% below year-ago levels but 4.5% above the five-year average. The bearish report pushed prices below the 200-day moving average at $4.455, a key level that drew buyers late in the session. However, the rally attempt faded quickly, suggesting limited conviction from the bulls.
Do Warmer Weather Models Undermine Demand Expectations?
Updated forecasts added pressure, as traders digested milder temperature expectations for the back half of November. According to Atmospheric G2, the U.S. is expected to see above-normal temperatures from November 19–28, particularly across the central and western regions.
While brief cold shots may still develop in the East, the overall warm bias into late November is likely to reduce heating-related demand and delay any meaningful inventory draws. That’s a bearish near-term signal for a market that needs consistent cold to tighten the supply-demand balance.
Is Rising Production Still Outpacing Demand Growth?
Production remains near record highs. Dry gas output in the Lower 48 reached 109.9 Bcf/day on Friday, up 7.1% from a year ago. Demand, meanwhile, was 80.0 Bcf/day, down 5.5% year-over-year, according to BNEF.
LNG exports improved, rising 5.9% week-over-week to 17.7 Bcf/day, but haven’t been enough to offset domestic oversupply. Adding to the pressure, the EIA raised its 2025 output estimate by 1.0% to 107.67 Bcf/day. Although gas rig counts dipped slightly last week to 125, the pullback is minor and follows a multi-month climb.
Short-Term Outlook: Bearish Bias With Downside Risk Intensifying