Natural Gas Outlook Turns Bearish Ahead of EIA Report

Author: James Hyerczyk

Published: September 10, 2026

Key Highlights

• October natural gas futures are experiencing a selloff due to a cooler 10-15 day weather forecast across key regions.
• The main trend has shifted down after breaking through the 50-day moving average and swing bottom support.
• The EIA storage report anticipates an injection of approximately 35 Bcf for the week ending September 4.

Market Analysis

October natural gas futures are declining as the southern two-thirds of the U.S. remains hot, but the market is reacting to a forecast indicating a drop in cooling demand. This shift is leading traders to price in a decrease in air-conditioning load as the market transitions into the fall shoulder season.

As of 10:32 GMT, October natural gas futures are trading at $2.792, down 1.06% from the previous day. The market has seen a decisive break below the 50-day moving average, which now acts as resistance at $2.876.

Technical Analysis

The recent price action indicates a trend change to bearish, with sellers dominating after reaching a swing top at $3.026 on September 3. The breakdown below the 50-day moving average and swing bottom at $2.832 confirms the downward trend.

The near-term price range is identified between $2.668 and $3.026. Continued pressure below the 61.8% retracement level at $2.805 could lead to further declines towards swing bottoms at $2.747, $2.685, and $2.668. A recovery above $3.026 is necessary for a trend reversal.

Weather Forecast Impact

According to NatGasWeather, the forecast for September 9-15 indicates that while the southern U.S. will remain warm, temperatures will begin to cool in the following days, leading to a reduction in cooling demand. This shift creates a gap in demand as the market transitions from summer cooling to winter heating.

Production Trends

U.S. dry gas production is currently at 113.5 Bcf per day, which is 3.9% higher than last year and above August's record levels. The EIA projects continued growth in production, potentially reaching new records in 2027. However, with cooling demand expected to decline, the market may struggle to absorb this high production level.

Upcoming EIA Report

The EIA's weekly storage report, scheduled for release at 14:30 GMT, is anticipated to be a key market catalyst. The expected injection of 35 Bcf follows a previous report showing a 30 Bcf build, which was below expectations. Despite storage levels being 5.2% above the five-year average, the market's bearish trend persists.

Conclusion

The outlook for natural gas is bearish as the market reacts to changing weather forecasts and high production levels. Traders are advised to monitor the upcoming EIA report closely, as it will likely influence market sentiment in the near term.