November Natural Gas Futures Hover Near $3 as Supply and Storage Pressures Weigh
November natural gas futures saw a volatile pre-market session before stabilizing near flat on Tuesday. The market's trend remains downward, but Friday's closing price reversal bottom and Monday's confirmation suggest a short-term shift in momentum. A sustained move above $3.395 would signal a shift to an upward trend, while a failure to hold $2.912 could indicate a continuation of the downtrend.
The market faces a mix of factors, including a surplus in storage and strong supply levels. Last week's 64 Bcf build was below the five-year average, but storage levels remain 79 Bcf above the average. The EIA projects storage to end the injection season at a 10-year high, which could limit upward price movements despite decent demand.
Output in the Lower-48 region continues to outpace expectations, with dry gas production at 111.9 Bcf per day, 3.3% above last year. The EIA has raised its 2027 dry-gas production estimate to 116.0 Bcf per day. Demand, while solid, is not enough to offset the supply, with state demand up 8.5% year over year and LNG flows slightly down from the prior week.
Near-term support for November gas is at the 50-day moving average of $3.033, with resistance levels at $3.087 to $3.146. The potential for short-covering could drive prices toward $3.146 to $3.154 in the near term, but the overall bias remains to the short side.