At 15:15 GMT, January Natural Gas Futures are trading $4.326, down $0.269 or -5.85%.

Is a Larger-Than-Average Storage Draw Enough to Offset Mild Forecasts?

Thursday’s EIA report is expected to show a sharply above-average storage withdrawal, reflecting last week’s colder-than-normal temperatures across the Midwest and Northeast. Forecast ranges are wide, from -167 Bcf to -174 Bcf, versus the five-year average draw of -89 Bcf.

While a draw of this magnitude would normally offer support, sentiment remains bearish due to the forecasted warmup. A strong print may provide only limited relief if traders believe next week’s milder pattern will suppress demand.

Weather Models Shift Bearish for Second Half of December

According to NatGasWeather, national demand will remain high through the weekend as frigid systems move through the Midwest and East. Highs in the 10s–30s and lows below freezing are expected to dominate through Sunday. However, next week’s forecast flips dramatically, with above-normal temperatures expected to spread across most of the Lower 48, sharply reducing heating demand into Christmas.

This warm bias has taken center stage for traders, undermining the impact of near-term cold and limiting upside momentum.

Technical Selling Accelerates as Key Levels Fail

The break below $4.495, previously serving as the 50-day moving average, triggered heavy liquidation as algorithmic and technical traders exited long positions. A cascade of selling followed as the $4.390 level failed, leaving the October 29 low at $4.052 as the next downside marker. Without supportive weather or sustained demand, the market appears vulnerable to further retracement.