Natural gas futures are pulling back Tuesday after Monday’s rally stalled just below key resistance levels. December contracts reached $4.298 in early-week trading, testing the long-term pivot at $4.336 and approaching the 200-day moving average at $4.458—both widely viewed as technical inflection points.
The recent advance, driven by colder weather expectations, defined a near-term range between $3.752 and $4.298. Initial support now stands at $4.025. If that pivot fails to hold, the next potential value zone sits near the 50-day moving average at $3.907. On the upside, traders are eyeing a breakout above $4.458, which could open the door to $4.717 if heating demand strengthens.
Weather Outlook Offers Near-Term Support but Mixed Signals Beyond
According to NatGasWeather, demand will remain light through Friday, then increase to moderate levels over the weekend as colder systems track across the northern U.S. NOAA’s latest forecast, however, shows a warming trend in the Southwest from November 7–11 and moderating temperatures along both coasts into mid-month.
This is tempering the bullish sentiment that initially drove prices higher. Traders will be watching for any material changes in forecasts that could push the market decisively in either direction.
Production Remains Elevated as LNG Flows Climb
Fundamentals continue to pose a headwind for further upside. U.S. lower-48 dry gas production was reported at 110.0 Bcf/day on Monday, up 6.6% year-over-year, with active natural gas rigs reaching a 2.25-year high of 125.
Meanwhile, LNG export flows rose 13.5% week-over-week to 16.8 Bcf/day, offering some demand-side support. Despite this, strong production levels continue to pressure prices, especially as inventories remain well supplied.