Natural Gas Dips $0.85 as Market Looks Bearish
Natural gas prices across the United States are falling as weather warms and selling pressure increases.
Quick overview
- Gas prices in the U.S. fell by $0.85 due to mild temperatures and increased selling pressure, contrary to winter market expectations.
- Natural gas futures dropped 8.33% as traders brace for extended lower prices amid excessive storage issues.
- The upcoming EIA report is anticipated to show higher-than-normal gas withdrawals, influenced by colder temperatures in the region.
- Weather forecasts predict a shift to warmer temperatures next week, which may contribute to continued low prices for natural gas.
Gas prices in the United States fell $0.85 on Thursday due to mild temperatures across the country and higher selling pressure, defying winter market expectations.
Weather forecasts for the continental United States say that next week will be hotter than expected, and the news caused natural gas to dip 8.33%. Traders are preparing for extended lower prices as excessive storage continues to be a problem for the industry.
Natural gas futures are now under key levels that signal to the market it is time to hold. Heavy selling has contributed to the lower prices, and they may be here to stay for a while.
New Storage Data Incoming
The new EIA report is coming out later today, and traders are expecting the numbers to show that more gas was withdrawn than normal. That would be thanks to the colder temperatures across the region, and when those colder temperatures were forecast, that helped spark the price of natural gas last week.
The current weather and market models predict a bearish next couple of weeks. As temperatures rise slightly and selling pressure continues to climb, prices should remain low. The five-year average draw is -89 Bcf, but the expectation for this latest EIA report is anywhere from -167 Bcf to -174 Bcf.
Weather forecasts are calling for a cold weekend with freezing temperatures present across the East and the Midwest. But next week, the story should be very different, and warmer weather is expected with higher than average temperatures for this time of year. That should bring the year to a close with prices falling even further from their current lows.
Traders will be watching the EIA report closely. If it varies significantly from what is expected, then the price could climb sharply up until the weekend, but the market is still anticipating bearish movement throughout next week due to pervasively warmer weather. The other limiting factor for the market is the higher than normal natural gas storage. This has been an issue for most of 2025, and demand has never spiked enough this year to bring those levels down, even as gas plants have been producing in excess of the norm and filling reserves higher than they usually are for this time of year.
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