Traders had already pushed November natural gas futures to $3.298 on storm speculation. The storage report did not give them a reason to keep paying up. The longs came out and took back the entire move.

The EIA is still looking for end-of-October storage near 3,985 bcf, the highest level in a decade. That forecast can change. It is why buyers are not treating every Gulf shut-in as the start of a new rally.

The Weather Forecast Is Not Helping

High pressure through October 14 across most of the country. NatGasWeather sees low demand over the next five days and only moderate demand late in the period. The forecast turned warmer through October 12. The models are not turning cold.

LNG flows and power demand are doing some work around the edges. LNG net flows were running near 19 bcf per day Thursday. Electricity output is above a year ago. The hurricane could interrupt both for a few days. That makes the storm a short-term event, not a reason to change the supply picture.

What to Watch

Thursday’s storage build and the warm forecast are what November natural gas futures have to trade after the storm passes. The hurricane kept shorts from pressing Friday. The $3.210 to $3.216 retracement zone is where the sellers showed up Thursday and again Friday at $3.236. Buyers could not hold above it either session.

The bias leans to the downside with the main trend down on the swing chart. The $3.146 to $3.154 support held Friday’s low at $3.112. November natural gas futures are sitting above the 50-day moving average at $3.045. That is what keeps the short-covering rallies alive inside a downtrend. A break back under $3.146 puts $3.105 and $3.087 on the chart. The storm has to keep supply offline longer than a weekend to change any of it.

More Information in our Economic Calendar.