Natural Gas Futures Hold Near Key Support Amid Mild Weather Outlook

November natural gas futures are holding just above the 50-day moving average at $3.032, with buyers defending this key support level after an earlier test of $3.00. The market remains caught between this support and resistance starting at $3.087, with further upside targets at $3.146, $3.216, and $3.264. Should the 50-day moving average fail to hold, support levels at $2.912, $2.902, and $2.896 could come into play.

Weather patterns are playing a crucial role in natural gas pricing. While parts of California are experiencing near-100-degree temperatures, keeping cooling demand strong, other regions like the Great Lakes and Northeast are seeing the first signs of heating demand with overnight lows in the 30s and 40s. However, the national outlook remains mild through mid-October, with most of the Lower 48 expected to stay in the 60s to 80s, limiting both heating and cooling demand.

The latest storage estimate for the week ended October 2 is projected at 79 billion cubic feet (Bcf), slightly above last year's 77 Bcf but below the five-year average injection of roughly 96 Bcf. Current working gas levels stand at 3,415 Bcf, about 79 Bcf over the five-year average, indicating that supply continues to outpace demand. This surplus is keeping sellers comfortable, as production nears 107.5 Bcf per day against demand close to 103 Bcf per day.

Market watchers are focusing on the afternoon weather update, as mild conditions through mid-October could continue to pressure prices. The Gulf low is not expected to impact supply significantly. The next major storage report will be closely monitored for any shifts in the market's balance.