European storage levels are also supportive for supply confidence, with stocks at 61% capacity compared to a five-year seasonal average of 70%.

How Do Production and Power Demand Factor Into the Outlook?

Lower-48 dry gas production remains strong at 105.3 Bcf/day (+3.6% y/y), while demand fell to 77.5 Bcf/day (-8.6% y/y), highlighting the near-term oversupply environment.

LNG net flows to U.S. export terminals stand at 15.0 Bcf/day (+0.9% w/w), maintaining steady export demand but insufficient to fully offset domestic oversupply.

Meanwhile, the Edison Electric Institute reported a +1% y/y increase in U.S. electricity output last week, reflecting a positive driver for baseline natural gas demand from utilities, although not enough to overshadow the cooler weather risk.

Market Forecast: Bearish Bias Holding

The near-term outlook remains bearish for natural gas, with the combination of cooler weather forecasts, strong production, and above-average storage builds outweighing steady export and power demand.

A move below $3.149 would reinforce downside momentum toward $2.885, while resistance near $3.574 and the $3.794–$3.800 zone will likely cap rallies unless weather models turn materially hotter.

Traders should remain cautious, with a bearish bias favored into the EIA data release and early next week’s trade.

More Information in our Economic Calendar.