Natural Gas Radar

2025-10-31 23:48

Table of Contents

Brian's Thoughts

Published: 10/31/2025 Focus: Natural Gas
Now that we’re trading December - we’ve dropped right to the levels we expected - 4.08 down to 3.788 (with 3.75 as the touch point). A move to 3.679 would not surprise me here….but there could be some movement tomorrow as storage will come out and put us just shy of 3.9 TCF (through the 24th of the month - leaving 7 days until EOS). I expect us to end up around 3.93 (so Bill gets the “closest to the pin” as my number was 3.85 and his was 3.95). We have extended up on ironically bearish fundamentals - production is up, November weather is bearish, and LNG is up but not nearly enough (YET!!). We ended the week above $4 (and there are still some gaps way above like at 4.75….but those won’t really enter the equation until later in the winter.

Today's Update

Updated: 2025-10-31 23:46:51 Length: 500 chars
Natural gas prices have recently surged, hitting a 7-month high, fueled by forecasts of colder temperatures and strong LNG demand. Currently trading between $4.08 and $3.788, the market anticipates storage levels nearing 3.9 TCF, with a bullish outlook despite increased production and bearish November weather. As we approach the end of the month, keep an eye on upcoming inventory reports, which could impact prices further. With the winter season approaching, fluctuations are expected—stay tuned!

Executive Summary

Total supply decreased by 0.2 BCFD | Total demand increased by 3.9 BCFD | Market is oversupplied by 3.3 BCFD

Technical Analysis

Overall Technical Score (-5 to +5): 0 (Neutral)
Current Price: $4.12
Signal: Neutral

Moving Averages (9/20)

BULLISH

MA(9): $3.53

MA(20): $3.34

Current Price is 4.12, 9 day MA 3.53, 20 day MA 3.34

MACD (12, 26, 9)

BULLISH

MACD: 0.1677

Signal: 0.0933

Days since crossover: 9

MACD crossed the line 9 days ago and is in a bullish setup

RSI (14)

OVERBOUGHT

Value: 72.96

Category: OVERBOUGHT

RSI is 72.96 (note 70% is overbought and 30% is oversold)

Volume (vs 20d Avg)

HIGHER

Current: 231,308

Avg (20d): 171,993

Ratio: 1.34

Volume is higher versus 20 day average

Stochastic (14, 3)

OVERBOUGHT

%K: 96.76

%D: 86.04

Stochastic %K: 96.76, %D: 86.04. Signal: overbought

ADX (14)

WEAK TREND

ADX: 21.49

+DI: 40.72

-DI: 14.37

ADX: 21.49 (+DI: 40.72, -DI: 14.37). Trend: weak trend

Williams %R (14)

OVERBOUGHT

Value: -3.24

Williams %R: -3.24 (overbought)

Bollinger Bands (20, 2)

BREAKOUT UPPER

Upper: 3.92

Middle: 3.34

Lower: 2.77

Price vs BBands (20, 2): breakout upper. Upper: 3.92, Middle: 3.34, Lower: 2.77

Fundamental Analysis

Category Current (BCFD) Last Week Last Year 3 Yr Avg
Dry Production 105.1 104.6 101.5 100.87
LNG Imports 0.0 0.0 0.1 0.17
Canadian Imports 5.7 5.6 6.4 5.8
Total Supply 110.8 110.2 108.0 106.87
Industrial Demand 23.9 23.4 22.9 23.03
Electric Power Demand 34.0 31.7 34.2 32.37
Residential & Commercial 19.3 20.4 16.0 17.6
LNG Exports 17.0 16.9 13.7 13.13
Mexico Exports 6.5 6.4 6.3 6.1
Pipeline Fuel 6.8 6.8 6.7 6.83
Total Demand 107.5 105.6 99.7 99.0
Supply/Demand Balance 3.3 4.6 8.3 7.87

Weather Analysis

Weather Impact Summary

Overall: HEATING dominated (HDD: 7.2, CDD: 2.5)
Residential/Commercial: MODERATE heating demand expected
Power Generation: LOW cooling demand expected

Regional Weather Patterns

Northeast

Heating dominated (HDD: 9.0)

Midwest

Heating dominated (HDD: 18.0)

South

Cooling dominated (CDD: 2.0)

West

Cooling dominated (CDD: 10.5)

Degree Days by City

Chicago, IL

Heating Degree Days (HDD): 18.0
Cooling Degree Days (CDD): 0
Total HDD: 125.0
Total CDD: 0

New York, NY

Heating Degree Days (HDD): 10.0
Cooling Degree Days (CDD): 0
Total HDD: 92.0
Total CDD: 0

Houston, TX

Heating Degree Days (HDD): 0.0
Cooling Degree Days (CDD): 2.0
Total HDD: 4.5
Total CDD: 27.0

Los Angeles, CA

Heating Degree Days (HDD): 0
Cooling Degree Days (CDD): 10.5
Total HDD: 0
Total CDD: 94.0

Philadelphia, PA

Heating Degree Days (HDD): 8.0
Cooling Degree Days (CDD): 0
Total HDD: 68.0
Total CDD: 0

Economic Analysis

Economic Sentiment Summary

NEGATIVE - Economic indicators showing headwinds
Dollar Impact: Strong USD may pressure commodity prices
Industrial Demand: Weaker industrial demand signals
Interest Rate Impact: Rising rates may impact energy demand
Risk Sentiment: Low market volatility/risk appetite

Economic Indicators

USD_INDEX

99.72
Daily: 0.19 (0.19%)
Weekly: 0.94 (0.95%)

US_10Y

4.1
Daily: 0.01 (0.2%)
Weekly: 0.1 (2.6%)

SP500

6840.2
Daily: 17.86 (0.26%)
Weekly: -34.96 (-0.51%)

VIX

17.44
Daily: 0.53 (3.13%)
Weekly: 1.65 (10.45%)

GOLD

4013.4
Daily: 12.1 (0.3%)
Weekly: 11.5 (0.29%)

COPPER

5.11
Daily: 0.04 (0.71%)
Weekly: -0.03 (-0.52%)

CFTC Commitment of Traders Analysis

Natural Gas Positioning (NAT GAS NYME - NEW YORK MERCANTILE EXCHANGE)

Report Date: 2025-09-23
Sentiment: Bearish and Strengthening
Positioning: Normal Range

Open Interest

1,626,777
Change: -11,903

Managed Money

-63,176
Change: -40,085
-3.9% of OI

Producer/Merchant

-4,944
Change: +8,712
-0.3% of OI

Swap Dealers

124,686
Change: +6,611
7.7% of OI

Other Reportables

-64,908
Change: +22,945
-4.0% of OI

Analysis Rationale (Managed Money):

  • Managed Money sentiment: bearish and strengthening

Crude Oil Positioning (WTI-PHYSICAL - NEW YORK MERCANTILE EXCHANGE)

Report Date: 2025-09-23
Sentiment: Bullish but Weakening
Positioning: Normal Range

Open Interest

1,936,690
Change: -25,930

Managed Money

26,483
Change: -10,316
1.4% of OI

Producer/Merchant

283,712
Change: -9,029
14.6% of OI

Swap Dealers

-402,312
Change: +5,178
-20.8% of OI

Analysis Rationale (Managed Money):

  • Managed Money sentiment: bullish but weakening

LNG Market Analysis

LNG Market Summary

TTF prices decreased to 10.900 EUR/MWh (-0.016). JKM prices decreased to 11.130 USD/MMBtu (-0.085). JKM is trading at a premium of 0.230 to TTF, indicating strong Asian demand.

TTF Prices

10.900

-0.016

Front month: NOV 25

As of 2025-10-31

JKM Prices

11.130

-0.085

Front month: DEC 25

As of 2025-10-31

JKM-TTF Spread

0.230

2.11%

JKM is trading at a premium to TTF, indicating strong Asian demand.

As of 2025-10-31

Forward Curves Visualization
TTF (EUR/MWh)
JKM (USD/MMBtu)
11.2
10.9
10.6
10.3
10.0
10.90
11.13
NOV 25
10.65
11.06
DEC 25
10.75
10.98
JAN 26
10.79
10.66
FEB 26
10.67
10.18
MAR 26
10.29
10.13
APR 26
10.18
10.29
MAY 26
10.19
10.41
JUN 26
10.22
10.57
JUL 26
10.28
10.63
AUG 26
10.37
10.63
SEP 26
10.47
10.88
OCT 26
TTF Forward Curve (Next 12 Months)
Month Price (EUR/MWh)
NOV 25 10.900
DEC 25 10.648
JAN 26 10.750
FEB 26 10.789
MAR 26 10.670
APR 26 10.295
MAY 26 10.178
JUN 26 10.194
JUL 26 10.218
AUG 26 10.276
SEP 26 10.370
OCT 26 10.466
JKM Forward Curve (Next 12 Months)
Month Price (USD/MMBtu)
DEC 25 11.130
JAN 26 11.065
FEB 26 10.980
MAR 26 10.665
APR 26 10.180
MAY 26 10.130
JUN 26 10.295
JUL 26 10.415
AUG 26 10.575
SEP 26 10.630
OCT 26 10.635
NOV 26 10.875

News & Sentiment Analysis

Fibonacci Levels Analysis

Current Price: $4.12
Closest Support: $3.83 7.04% below current price
Closest Resistance: $4.16 0.97% above current price

Fibonacci Retracement Levels

0.0 $2.62
0.236 $2.98
0.382 $3.21
0.5 $3.39
0.618 $3.57
0.786 $3.83 Support
1.0 $4.16 Resistance

Fibonacci Extension Levels

1.272 $4.57
1.618 $5.11
2.0 $5.69
2.618 $6.64

ML Price Prediction

Current Price: $3.96
Forecast Generated: 2025-10-31 23:47:45
Next Trading Day: DOWN 1.66%
Date Prediction Lower Bound Upper Bound
2025-10-31 $3.89 $3.55 $4.23
2025-11-01 $3.89 $3.55 $4.23
2025-11-02 $3.92 $3.58 $4.26
2025-11-03 $3.92 $3.58 $4.26
2025-11-04 $3.87 $3.53 $4.21

ML Insights

  • Forecast generated using ARIMA(5, 1, 0).
  • The model predicts a price decrease of ~1.66% for the next trading day (2025-10-31), reaching $3.89.
  • The 5-day forecast suggests relatively stable prices between 2025-10-31 and 2025-11-04.
  • The average confidence interval width is ~17.4% of the predicted price, indicating model uncertainty.
  • SIGNAL: Weak bearish signal, high uncertainty.

AI Analysis

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For Energy Traders:

Current market data indicates a neutral technical interpretation with a Fibonacci support level at 3.83 and resistance at 4.16. Traders should be cautious as the ML price forecast indicates a potential decline of 1.66% within the range of 3.55 to 4.23. This presents both opportunities for short-term trades and risks of volatility in the near term.

For Producers (Oil & Gas Companies):

The fundamental balance stands at 3.30 BCFD with a slight decrease of -4.10, indicating a stable supply environment. However, the market sentiment is mixed with a positive outlook for natural gas (+0.600) while crude oil sentiment is (-0.400). Producers may need to adjust their hedging strategies accordingly to mitigate risks associated with fluctuating demand and geopolitical uncertainties.

🏭

For Consumers (Industrial/Utilities):

With moderate heating demand expected due to recent weather forecasts, consumers should prepare for potential cost fluctuations. The fundamental balance suggests a stable supply, yet the negative sentiment in crude oil could impact overall energy prices. It may be prudent for consumers to consider procurement strategies that hedge against price volatility in the upcoming months.

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For Commodity Professionals (Analysts, Consultants):

The market presents a neutral sentiment overall, with specific bullish signals for natural gas amid a bearish outlook for crude oil. The weather outlook favors heating demand, particularly in the Northeast and Midwest regions, which could influence short-term price movements. Analysts should focus on the driving factors such as geopolitical risks and supply dynamics to anticipate potential market shifts.

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.