Nat Gas is not quite as bullish as price action is making it out to believe - the COT is showing a slight (ever so slight) positioning from the hedge funds to the short side. Fair value is likely closer to $3.75 right now (which is pretty close to where the February contract is trading). While the outlook for the next month looks to be relatively “normal” - we are also in winter - weather can change very quickly so you have to watch new weather runs every day (check wxrogue.com). What we saw in Jan-2025 is that ONE WEEK changed the winter, and we are entering the two months that can surprise to the upside on weather. This week I am looking for the Feb contract to either retrace up to 4.20 (will need some new weather fuel) or fade back down to 3.75 from 3.87. International LNG markets are getting soft - that is something that concerns me for the spring.
ER
Natural Gas Radar
2025-12-29 23:48
Table of Contents
Brian's Thoughts
Today's Update
Natural gas markets are feeling the chill as prices hover around $3.87, with fair value estimated near $3.75. Despite recent spikes due to plunging U.S. temperatures, hedge fund positioning shows a slight shift to the short side. As we enter winter's unpredictable phase, weather patterns could surprise traders, potentially pushing February contracts towards $4.20 or back to $3.75. Meanwhile, international LNG markets are softening, raising concerns for spring demand. Keep an eye on weather forecasts—they’re the wildcard in this game!
Executive Summary
Total supply decreased by 0.1 BCFD | Total demand decreased by 19.58 BCFD | Market is undersupplied by 7.52 BCFD
Technical Analysis
Overall Technical Score (-5 to +5):
1
(Neutral)
Current Price:
$3.97
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $4.08
MA(20): $4.42
Current Price is 3.97, 9 day MA 4.08, 20 day MA 4.42
MACD (12, 26, 9)
BEARISH
MACD: -0.0681
Signal: -0.029
Days since crossover: 14
MACD crossed the line 14 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 43.28
Category: NEUTRAL
RSI is 43.28 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 2,042
Avg (20d): 181,853
Ratio: 0.01
Volume is lower versus 20 day average
Stochastic (14, 3)
BEARISH CROSS
%K: 16.37
%D: 27.66
Stochastic %K: 16.37, %D: 27.66. Signal: bearish cross
ADX (14)
WEAK TREND
ADX: 23.83
+DI: 23.82
-DI: 21.41
ADX: 23.83 (+DI: 23.82, -DI: 21.41). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -83.63
Williams %R: -83.63 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 5.29
Middle: 4.42
Lower: 3.54
Price vs BBands (20, 2): below middle. Upper: 5.29, Middle: 4.42, Lower: 3.54
Fundamental Analysis
| Category | Current (BCFD) | Last Week | Last Year | 3 Yr Avg |
|---|---|---|---|---|
| Dry Production | 109.7 | 108.8 | 104.0 | 103.13 |
| LNG Imports | 0.0 | 0.0 | 0.0 | 0.07 |
| Canadian Imports | 5.5 | 6.5 | 6.2 | 5.53 |
| Total Supply | 115.2 | 115.3 | 110.2 | 108.73 |
| Industrial Demand | 21.3 | 24.7 | 25.4 | 24.93 |
| Electric Power Demand | 32.9 | 41.7 | 34.1 | 32.83 |
| Residential & Commercial | 35.1 | 42.3 | 39.4 | 37.5 |
| LNG Exports | 18.3 | 18.5 | 14.3 | 13.77 |
| Mexico Exports | 6.3 | 6.4 | 6.0 | 5.83 |
| Pipeline Fuel | 8.83 | 8.83 | 7.8 | 7.67 |
| Total Demand | 122.72 | 142.3 | 127.0 | 122.57 |
| Supply/Demand Balance | -7.52 | -27.0 | -16.8 | -13.83 |
Weather Analysis
Natural Gas Weather Impact:
HIGH heating demand - significant cold spell (BELOW normal heating demand)
(Heating-dominated conditions driving natural gas demand)
Weather Analysis Summary
Heating Degree Days (Utility Gas Weighted)
Last 7 Days:
154.0 HDD
-66.0 vs Normal
Next 7 Days:
212.0 HDD
+3.0 vs Normal
Cooling Degree Days (Population Weighted)
Last 7 Days:
4.0 CDD
+4.0 vs Normal
Next 7 Days:
0.0 CDD
+0.0 vs Normal
Weather Trend Analysis (Click charts to zoom)
HDD Analysis
CDD Analysis
×
![Zoomed Chart]()
Chart Analysis
Detailed Data
Recent HDD Data
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 12/21 | 26.0 | 31.0 | -5.0 |
| 12/22 | 25.0 | 31.0 | -6.0 |
| 12/23 | 21.0 | 31.0 | -10.0 |
| 12/24 | 19.0 | 31.0 | -12.0 |
| 12/25 | 19.0 | 32.0 | -13.0 |
| 12/26 | 22.0 | 33.0 | -11.0 |
| 12/27 | 22.0 | 31.0 | -9.0 |
HDD Forecast
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 12/29 | 29.0 | 29.0 | +0.0 |
| 12/30 | 33.0 | 30.0 | +3.0 |
| 12/31 | 30.0 | 30.0 | +0.0 |
| 01/01 | 32.0 | 30.0 | +2.0 |
| 01/02 | 31.0 | 30.0 | +1.0 |
| 01/03 | 28.0 | 30.0 | -2.0 |
| 01/04 | 29.0 | 30.0 | -1.0 |
Recent CDD Data
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 12/21 | 0.0 | 0.0 | +0.0 |
| 12/22 | 0.0 | 0.0 | +0.0 |
| 12/23 | 0.0 | 0.0 | +0.0 |
| 12/24 | 1.0 | 0.0 | +1.0 |
| 12/25 | 1.0 | 0.0 | +1.0 |
| 12/26 | 1.0 | 0.0 | +1.0 |
| 12/27 | 1.0 | 0.0 | +1.0 |
CDD Forecast
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 12/29 | 0.0 | 0.0 | +0.0 |
| 12/30 | 0.0 | 0.0 | +0.0 |
| 12/31 | 0.0 | 0.0 | +0.0 |
| 01/01 | 0.0 | 0.0 | +0.0 |
| 01/02 | 0.0 | 0.0 | +0.0 |
| 01/03 | 0.0 | 0.0 | +0.0 |
| 01/04 | 0.0 | 0.0 | +0.0 |
Data Source: NOAA Climate Prediction Center (CPC)
Region: CONUS
Climatology: 1981-2010 Normal Period
Economic Analysis
Economic Sentiment Summary
POSITIVE - Economic indicators generally supportive
Dollar Impact:
Weaker USD may support commodity prices
Industrial Demand:
Strong industrial demand signals
Interest Rate Impact:
Stable/lower rates may support demand
Risk Sentiment:
Low market volatility/risk appetite
Economic Indicators
USD_INDEX
98.01
Daily:
-0.01 (-0.01%)
Weekly:
-0.28 (-0.28%)
US_10Y
4.12
Daily:
-0.02 (-0.48%)
Weekly:
-0.05 (-1.27%)
SP500
6905.74
Daily:
-24.2 (-0.35%)
Weekly:
27.25 (0.4%)
VIX
14.2
Daily:
0.6 (4.41%)
Weekly:
0.12 (0.85%)
GOLD
4379.2
Daily:
-149.9 (-3.31%)
Weekly:
-65.4 (-1.47%)
COPPER
5.71
Daily:
-0.06 (-1.01%)
Weekly:
0.27 (4.97%)
CFTC Commitment of Traders Analysis
Natural Gas Positioning (NAT GAS NYME - NEW YORK MERCANTILE EXCHANGE)
Report Date: 2025-12-16
Sentiment: Bearish and Strengthening
Positioning: Normal Range
Open Interest
1,574,623
Change: +23,860
Managed Money
-66,328
Change: -35,237
-4.2% of OI
Producer/Merchant
-14,725
Change: +29,737
-0.9% of OI
Swap Dealers
130,632
Change: +1,452
8.3% of OI
Other Reportables
-61,709
Change: +13,679
-3.9% of OI
Analysis Rationale (Managed Money):
- Managed Money sentiment: bearish and strengthening
Crude Oil Positioning (WTI-PHYSICAL - NEW YORK MERCANTILE EXCHANGE)
Report Date: 2025-12-16
Sentiment: Bullish but Weakening
Positioning: Normal Range
Open Interest
1,916,438
Change: +48,472
Managed Money
74
Change: -6,804
0.0% of OI
Producer/Merchant
247,515
Change: -4,668
12.9% of OI
Swap Dealers
-320,087
Change: +10,593
-16.7% of OI
Analysis Rationale (Managed Money):
- Managed Money sentiment: bullish but weakening
LNG Market Analysis
LNG Market Summary
TTF prices remained stable to 9.478 EUR/MWh (+0.000). JKM prices decreased to 9.720 USD/MMBtu (-0.010). JKM is trading at a premium of 0.242 to TTF, indicating strong Asian demand.
TTF Prices
9.478
+0.000Front month: JAN 26
As of 2025-12-29
JKM Prices
9.720
-0.010Front month: FEB 26
As of 2025-12-29
JKM-TTF Spread
0.242
2.55%JKM is trading at a premium to TTF, indicating strong Asian demand.
As of 2025-12-29
Forward Curves Visualization
TTF (EUR/MWh)
JKM (USD/MMBtu)
10.2
10.0
9.7
9.4
9.2
TTF Forward Curve (Next 12 Months)
| Month | Price (EUR/MWh) |
|---|---|
| JAN 26 | 9.478 |
| FEB 26 | 9.650 |
| MAR 26 | 9.553 |
| APR 26 | 9.363 |
| MAY 26 | 9.255 |
| JUN 26 | 9.264 |
| JUL 26 | 9.285 |
| AUG 26 | 9.325 |
| SEP 26 | 9.407 |
| OCT 26 | 9.447 |
| NOV 26 | 9.603 |
| DEC 26 | 9.706 |
JKM Forward Curve (Next 12 Months)
| Month | Price (USD/MMBtu) |
|---|---|
| FEB 26 | 9.720 |
| MAR 26 | 9.640 |
| APR 26 | 9.335 |
| MAY 26 | 9.285 |
| JUN 26 | 9.405 |
| JUL 26 | 9.540 |
| AUG 26 | 9.680 |
| SEP 26 | 9.630 |
| OCT 26 | 9.625 |
| NOV 26 | 9.670 |
| DEC 26 | 10.050 |
| JAN 27 | 10.155 |
News & Sentiment Analysis
Market Sentiment Overview
BULLISH
Average Polarity:
0.675
Confidence:
1.0
Articles Analyzed:
31
Last Updated:
2025-12-29 23:47:34
Commodity Sentiment
NATURAL_GAS
0.75
CRUDE_OIL
0.6
Top News Topics
Demand (1 articles)
- Oil Gains on China Demand Outlook Trading Economics
Infrastructure (1 articles)
- Natural Gas Holds Rebound after Storage Decline Trading Economics
Weather (1 articles)
Fibonacci Levels Analysis
Current Price:
$3.97
Closest Support:
$3.89
2.02% below current price
Closest Resistance:
$4.19
5.54% above current price
Fibonacci Retracement Levels
0.0
$2.89
0.236
$3.51
0.382
$3.89
Support
0.5
$4.19
Resistance
0.618
$4.5
0.786
$4.94
1.0
$5.5
Fibonacci Extension Levels
1.272
$6.2
1.618
$7.1
2.0
$8.1
2.618
$9.71
ML Price Prediction
Current Price:
$4.69
Forecast Generated:
2025-12-29 23:47:34
Next Trading Day:
DOWN 1.18%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2025-12-30 | $4.63 | $4.25 | $5.02 |
| 2025-12-31 | $4.66 | $4.28 | $5.04 |
| 2026-01-01 | $4.67 | $4.29 | $5.06 |
| 2026-01-02 | $4.67 | $4.29 | $5.05 |
| 2026-01-03 | $4.66 | $4.27 | $5.04 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price decrease of ~1.18% for the next trading day (2025-12-30), reaching $4.63.
- The 5-day forecast suggests relatively stable prices between 2025-12-30 and 2026-01-03.
- The average confidence interval width is ~16.4% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bearish signal, high uncertainty.
AI Analysis
For Energy Traders:
The market is currently showing a neutral technical outlook with a score of 1/5. Key Fibonacci support is at 3.89 and resistance at 4.19. With the ML price forecast indicating a potential downward trend of 1.18%, traders should be cautious of short-term opportunities while monitoring volatility. The overall market sentiment remains bullish, particularly for natural gas, which could create short-term trading opportunities if prices hold above support levels.
For Producers (Oil & Gas Companies):
The current fundamental balance is at -7.52 BCFD, indicating a tighter supply situation with a significant change of +19.48. This could impact production planning and necessitate adjustments in hedging strategies. The bullish sentiment regarding natural gas, alongside the news of storage declines, suggests that maintaining production levels could be advantageous. However, producers should also consider the potential for price volatility in the near term as indicated by ML forecasts.
For Consumers (Industrial/Utilities):
With high heating demand anticipated due to the weather outlook, consumers should prepare for potential cost fluctuations in natural gas. The high heating degree days (HDD) of 21.4 indicates increased consumption needs, particularly in the Northeast and Midwest regions. The current downward price forecast may provide a window for procurement, but the risk of supply reliability should not be overlooked, especially in light of the recent storage declines.
For Commodity Professionals (Analysts, Consultants):
The market is exhibiting a complex picture with a bullish sentiment overall, particularly for natural gas, against a backdrop of tightening supply reflected in the fundamental balance. The technical indicators suggest a neutral stance, with key support and resistance levels identified. Analysts should closely monitor the interplay between weather forecasts and supply-demand dynamics, as these will be pivotal in shaping market movements in the near term. The ML price forecast indicating a potential decline may also signal a shift in market sentiment that requires further observation.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.