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
2025-12-30 23:48
Table of Contents
Brian's Thoughts
Today's Update
Natural gas prices are in a precarious position, experiencing some volatility amid mixed signals. Recent positioning from hedge funds shows a slight shift to the short side, indicating bearish sentiment. Current fair value hovers around $3.75, while the February contract trades near $3.87. Weather patterns remain a critical factor, with the potential for sudden shifts due to winter conditions. Watch closely for price movements around $4.20 or a retreat back to $3.75, as international LNG markets are softening, raising concerns for spring demand.
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:
$3.91
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $4.17
MA(20): $4.4
Current Price is 3.91, 9 day MA 4.17, 20 day MA 4.4
MACD (12, 26, 9)
BEARISH
MACD: -0.0428
Signal: -0.0226
Days since crossover: 1
MACD crossed the line 1 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 42.97
Category: NEUTRAL
RSI is 42.97 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 2,929
Avg (20d): 179,597
Ratio: 0.02
Volume is lower versus 20 day average
Stochastic (14, 3)
BEARISH CROSS
%K: 12.34
%D: 45.03
Stochastic %K: 12.34, %D: 45.03. Signal: bearish cross
ADX (14)
WEAK TREND
ADX: 24.56
+DI: 26.11
-DI: 22.54
ADX: 24.56 (+DI: 26.11, -DI: 22.54). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -87.66
Williams %R: -87.66 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 5.26
Middle: 4.4
Lower: 3.54
Price vs BBands (20, 2): below middle. Upper: 5.26, Middle: 4.4, 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:
149.0 HDD
-70.0 vs Normal
Next 7 Days:
206.0 HDD
-5.0 vs Normal
Cooling Degree Days (Population Weighted)
Last 7 Days:
5.0 CDD
+5.0 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 |
|---|---|---|---|
| 12/22 | 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 |
| 12/28 | 21.0 | 30.0 | -9.0 |
HDD Forecast
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 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 | 29.0 | 30.0 | -1.0 |
| 01/03 | 28.0 | 30.0 | -2.0 |
| 01/04 | 28.0 | 30.0 | -2.0 |
| 01/05 | 26.0 | 31.0 | -5.0 |
Recent CDD Data
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 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 |
| 12/28 | 1.0 | 0.0 | +1.0 |
CDD Forecast
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 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 |
| 01/05 | 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:
Strong USD may pressure 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
98.29
Daily:
0.25 (0.26%)
Weekly:
0.35 (0.36%)
US_10Y
4.13
Daily:
0.01 (0.34%)
Weekly:
-0.04 (-0.94%)
SP500
6896.24
Daily:
-9.5 (-0.14%)
Weekly:
-13.55 (-0.2%)
VIX
14.33
Daily:
0.13 (0.92%)
Weekly:
0.33 (2.36%)
GOLD
4358.3
Daily:
33.2 (0.77%)
Weekly:
-124.5 (-2.78%)
COPPER
5.71
Daily:
0.22 (3.98%)
Weekly:
0.23 (4.25%)
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 increased to 9.491 EUR/MWh (+0.013). JKM prices decreased to 9.690 USD/MMBtu (-0.030). JKM is trading at a premium of 0.199 to TTF, indicating strong Asian demand.
TTF Prices
9.491
+0.013Front month: JAN 26
As of 2025-12-30
JKM Prices
9.690
-0.030Front month: FEB 26
As of 2025-12-30
JKM-TTF Spread
0.199
2.10%JKM is trading at a premium to TTF, indicating strong Asian demand.
As of 2025-12-30
Forward Curves Visualization
TTF (EUR/MWh)
JKM (USD/MMBtu)
10.3
10.0
9.8
9.5
9.2
TTF Forward Curve (Next 12 Months)
| Month | Price (EUR/MWh) |
|---|---|
| JAN 26 | 9.491 |
| FEB 26 | 9.771 |
| MAR 26 | 9.663 |
| APR 26 | 9.441 |
| MAY 26 | 9.321 |
| JUN 26 | 9.328 |
| JUL 26 | 9.350 |
| AUG 26 | 9.385 |
| SEP 26 | 9.474 |
| OCT 26 | 9.514 |
| NOV 26 | 9.664 |
| DEC 26 | 9.762 |
JKM Forward Curve (Next 12 Months)
| Month | Price (USD/MMBtu) |
|---|---|
| FEB 26 | 9.690 |
| MAR 26 | 9.695 |
| APR 26 | 9.420 |
| MAY 26 | 9.345 |
| JUN 26 | 9.470 |
| JUL 26 | 9.600 |
| AUG 26 | 9.740 |
| SEP 26 | 9.695 |
| OCT 26 | 9.670 |
| NOV 26 | 9.725 |
| DEC 26 | 10.100 |
| JAN 27 | 10.220 |
News & Sentiment Analysis
Market Sentiment Overview
NEUTRAL
Average Polarity:
0.1
Confidence:
1.0
Articles Analyzed:
41
Last Updated:
2025-12-30 23:47:42
Commodity Sentiment
CRUDE_OIL
-0.4
NATURAL_GAS
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
Geopolitical (1 articles)
Weather (1 articles)
Fibonacci Levels Analysis
Current Price:
$3.91
Closest Support:
$3.89
0.51% below current price
Closest Resistance:
$4.19
7.16% 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:
$3.97
Forecast Generated:
2025-12-30 23:47:43
Next Trading Day:
UP 2.83%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2025-12-31 | $4.08 | $3.62 | $4.54 |
| 2026-01-01 | $4.08 | $3.62 | $4.54 |
| 2026-01-02 | $4.05 | $3.59 | $4.51 |
| 2026-01-03 | $4.01 | $3.55 | $4.47 |
| 2026-01-04 | $4.07 | $3.61 | $4.53 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price increase of ~2.83% for the next trading day (2025-12-31), reaching $4.08.
- The 5-day forecast suggests relatively stable prices between 2025-12-31 and 2026-01-04.
- The average confidence interval width is ~22.7% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bullish signal, high uncertainty.
AI Analysis
For Energy Traders:
Current market conditions suggest neutral sentiment with a technical score of 1/5. Traders should be cautious as price action is expected to fluctuate within the Fibonacci support level of 3.89 and resistance at 4.19. The ML forecast indicates a potential price increase of 2.83%, suggesting short-term trading opportunities. However, the overall market stability remains uncertain, and traders should monitor for volatility, especially given the fundamental balance of -7.52 BCFD.
For Producers (Oil & Gas Companies):
With a fundamental balance of -7.52 BCFD and a neutral market sentiment, producers should evaluate their hedging strategies carefully. The high heating demand forecasted due to significant heating degree days (HDD) indicates a robust market for natural gas, particularly in the Northeast and Midwest regions. Producers are advised to prepare for potential price fluctuations and consider adjusting production levels in response to the short-term price increase forecasted at 2.83%.
For Consumers (Industrial/Utilities):
Consumers should anticipate potential cost fluctuations due to the high heating demand forecasted from the weather outlook. The negative fundamental balance may lead to supply reliability risks, particularly during peak heating periods. It is advisable for consumers to review their procurement strategies and consider hedging options to mitigate the impact of anticipated price increases, as indicated by the ML forecast of a 2.83% rise in prices.
For Commodity Professionals (Analysts, Consultants):
The current market presents a neutral sentiment with significant implications from the fundamental balance of -7.52 BCFD and a technical score of 1/5. The strong heating demand across various regions is a key driver for natural gas pricing, while geopolitical factors are negatively impacting crude oil sentiment. Analysts should focus on the interplay between price forecasts and production adjustments to better understand potential market shifts.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.