With the heating season starting in the Henry Hub natural gas futures, the prices are rising fast. A year ago, a similar rally also began in mid-October, and prices kept climbing until they peaked in March. Right now, demand is close to those highs, but warmer weather forecasts for the coming days have slowed down buyers below the $4.70 per MMBtu level.
Weather remains one of the strongest drivers of gas prices, along with supply conditions. If temperatures this winter stay above average, heating demand may weaken, and this could limit the chances of new price highs this season.
Chances of peaks being later this month?
According to the November 6 report from the U.S. Energy Information Administration, the average price of U.S. Henry Hub gas contracts for the November to March heating season is forecast at $3.90 per MMBtu. Right now, prices are holding steady around $4.50, which suggests we may be close to medium-term highs if the market moves toward the $3.90 average in the coming weeks.
Warmer weather forecasts for the first half of December, a shift from earlier calls for an extreme cold wave, add more support to the view that gas prices could be forming near-term peaks.
Gas storage levels for the week ending November 14 were 4 percent above the five-year average, while gas withdrawals also rose by 2 billion cubic feet. These two moves balanced each other out, and the market treated the data as neutral. This matches the price chart, which has been moving sideways for the past three weeks.
The US Energy Information Administration also lifted its average price forecasts slightly. It now expects $3.47 per MMBtu for 2025, up from $3.42, and $4.02 per MMBtu for 2026, up from $3.94.
From 2014 to 2024, natural gas production in the United States has grown steadily. More recently, output rose 6 percent year-on-year, and the Permian Basin remained the largest supply driver. That leadership is likely to hold in the coming years. The energy policies of Donald Trump lean strongly toward fossil fuel support, and this stance also helps keep the long-term production trend intact through his term.
Pending breakout from Henry Hub contract consolidation
Prices for Henry Hub contracts are slowing down and trading in a local sideways range between $4.25 and $4.65 per MMBtu. On the technical side, the market could see a deeper pullback if prices fall below $4.15 per MMBtu, which would also break the fast-rising uptrend line that has been guiding the recent rally.
In such a scenario, the next support level is the area around $3.60 per MMBtu, which is achievable if average temperatures in December remain at higher levels. An upward breakout would give a signal for an attempt to approach the area of $4.90 per MMBtu.
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