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. Massive drop below 3.75 on NYE - points to 3.44…weather runs have softened outlook and demand profiles.
ER
Natural Gas Radar
2025-12-31 23:48
Table of Contents
Brian's Thoughts
Today's Update
Natural gas prices are experiencing volatility, driven by mild weather forecasts and ample supplies. Currently trading around $3.87, fair value seems closer to $3.75, suggesting potential for a pullback if conditions don't improve. The recent shift in hedge fund positioning towards short suggests caution. With winter still in play, weather changes can impact demand considerably. Keep an eye on the February contract, as it may retrace to $4.20 or dip back to $3.75. International LNG markets are softening, which could pose challenges ahead.
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:
$3.71
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $4.14
MA(20): $4.35
Current Price is 3.71, 9 day MA 4.14, 20 day MA 4.35
MACD (12, 26, 9)
BEARISH
MACD: -0.0793
Signal: -0.0332
Days since crossover: 2
MACD crossed the line 2 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 39.98
Category: NEUTRAL
RSI is 39.98 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 127,282
Avg (20d): 184,045
Ratio: 0.69
Volume is lower versus 20 day average
Stochastic (14, 3)
BEARISH CROSS
%K: 3.07
%D: 34.78
Stochastic %K: 3.07, %D: 34.78. Signal: bearish cross
ADX (14)
WEAK TREND
ADX: 23.08
+DI: 24.41
-DI: 26.12
ADX: 23.08 (+DI: 24.41, -DI: 26.12). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -96.93
Williams %R: -96.93 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 5.23
Middle: 4.35
Lower: 3.46
Price vs BBands (20, 2): below middle. Upper: 5.23, Middle: 4.35, Lower: 3.46
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:
155.0 HDD
-62.0 vs Normal
Next 7 Days:
204.0 HDD
-8.0 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 |
|---|---|---|---|
| 12/23 | 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 |
| 12/29 | 31.0 | 29.0 | +2.0 |
HDD Forecast
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 12/31 | 30.0 | 30.0 | +0.0 |
| 01/01 | 32.0 | 30.0 | +2.0 |
| 01/02 | 30.0 | 30.0 | +0.0 |
| 01/03 | 30.0 | 30.0 | +0.0 |
| 01/04 | 29.0 | 30.0 | -1.0 |
| 01/05 | 26.0 | 31.0 | -5.0 |
| 01/06 | 27.0 | 31.0 | -4.0 |
Recent CDD Data
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 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 |
| 12/29 | 0.0 | 0.0 | +0.0 |
CDD Forecast
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 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 |
| 01/06 | 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:
Rising rates may impact energy demand
Risk Sentiment:
Low market volatility/risk appetite
Economic Indicators
USD_INDEX
98.28
Daily:
0.04 (0.04%)
Weekly:
0.3 (0.31%)
US_10Y
4.16
Daily:
0.03 (0.8%)
Weekly:
0.03 (0.65%)
SP500
6845.5
Daily:
-50.74 (-0.74%)
Weekly:
-86.55 (-1.25%)
VIX
14.95
Daily:
0.62 (4.33%)
Weekly:
1.48 (10.99%)
GOLD
4332.1
Daily:
-38.0 (-0.87%)
Weekly:
-148.5 (-3.31%)
COPPER
5.69
Daily:
-0.03 (-0.58%)
Weekly:
0.2 (3.56%)
CFTC Commitment of Traders Analysis
Natural Gas Positioning (NAT GAS NYME - NEW YORK MERCANTILE EXCHANGE)
Report Date: 2025-12-23
Sentiment: Bearish and Strengthening
Positioning: Extremely Bearish (Potential Reversal Risk)
Open Interest
1,557,649
Change: -16,974
Managed Money
-106,407
Change: -40,079
-6.8% of OI
Producer/Merchant
-539
Change: +14,186
-0.0% of OI
Swap Dealers
148,136
Change: +17,504
9.5% of OI
Other Reportables
-49,913
Change: +11,796
-3.2% of OI
Analysis Rationale (Managed Money):
- Managed Money sentiment: bearish and strengthening
Crude Oil Positioning (WTI-PHYSICAL - NEW YORK MERCANTILE EXCHANGE)
Report Date: 2025-12-23
Sentiment: Bullish and Strengthening
Positioning: Normal Range
Open Interest
1,863,543
Change: -52,895
Managed Money
11,360
Change: +11,286
0.6% of OI
Producer/Merchant
245,148
Change: -2,367
13.2% of OI
Swap Dealers
-313,332
Change: +6,755
-16.8% of OI
Analysis Rationale (Managed Money):
- Managed Money sentiment: bullish and strengthening
LNG Market Analysis
LNG Market Summary
TTF prices decreased to 9.478 EUR/MWh (-0.013). JKM prices decreased to 9.570 USD/MMBtu (-0.120). JKM is trading at a premium of 0.092 to TTF, indicating strong Asian demand.
TTF Prices
9.478
-0.013Front month: JAN 26
As of 2025-12-31
JKM Prices
9.570
-0.120Front month: FEB 26
As of 2025-12-31
JKM-TTF Spread
0.092
0.97%JKM is trading at a premium to TTF, indicating strong Asian demand.
As of 2025-12-31
Forward Curves Visualization
TTF (EUR/MWh)
JKM (USD/MMBtu)
10.2
9.9
9.6
9.3
9.0
TTF Forward Curve (Next 12 Months)
| Month | Price (EUR/MWh) |
|---|---|
| JAN 26 | 9.478 |
| FEB 26 | 9.493 |
| MAR 26 | 9.405 |
| APR 26 | 9.225 |
| MAY 26 | 9.122 |
| JUN 26 | 9.146 |
| JUL 26 | 9.164 |
| AUG 26 | 9.199 |
| SEP 26 | 9.289 |
| OCT 26 | 9.328 |
| NOV 26 | 9.478 |
| DEC 26 | 9.582 |
JKM Forward Curve (Next 12 Months)
| Month | Price (USD/MMBtu) |
|---|---|
| FEB 26 | 9.570 |
| MAR 26 | 9.425 |
| APR 26 | 9.195 |
| MAY 26 | 9.140 |
| JUN 26 | 9.265 |
| JUL 26 | 9.400 |
| AUG 26 | 9.525 |
| SEP 26 | 9.490 |
| OCT 26 | 9.480 |
| NOV 26 | 9.525 |
| DEC 26 | 9.905 |
| JAN 27 | 10.060 |
News & Sentiment Analysis
Market Sentiment Overview
BEARISH
Average Polarity:
-0.267
Confidence:
1.0
Articles Analyzed:
59
Last Updated:
2025-12-31 23:47:50
Commodity Sentiment
NATURAL_GAS
-0.4
CRUDE_OIL
-0.4
HEATING_OIL
0.0
Top News Topics
Supply (1 articles)
Demand (1 articles)
- Oil Gains on China Demand Outlook Trading Economics
Infrastructure (1 articles)
- Natural Gas Holds Rebound after Storage Decline Trading Economics
Geopolitical (2 articles)
- Crude Oil Prices Supported by Global Geopolitical Risks Barchart
- Oil Prices Supported by Geopolitical Tensions — Market Talk Dow Jones Newswires
Weather (1 articles)
Fibonacci Levels Analysis
Current Price:
$3.71
Closest Support:
$3.51
5.39% below current price
Closest Resistance:
$3.89
4.85% above current price
Fibonacci Retracement Levels
0.0
$2.89
0.236
$3.51
Support
0.382
$3.89
Resistance
0.5
$4.19
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:
2025-12-31 23:47:50
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:
The current market sentiment is bearish, with a sentiment score of -0.267. Traders should be cautious as the technical indicators reveal a neutral stance (Score: 1/5) and a Fibonacci support level at 3.51 and resistance at 3.89. The ML price forecast suggests a potential upward movement of 2.83%, with a range of 3.62 to 4.54. However, the overall bearish sentiment and low cooling demand due to high heating demand could introduce volatility and short-term risks. Traders should monitor these dynamics closely for short-term opportunities.
For Producers (Oil & Gas Companies):
The fundamental balance indicates a significant negative shift at -7.52 BCFD, suggesting that supply may be tightening. Producers should consider adjusting their production planning accordingly. The bearish sentiment surrounding crude oil, evidenced by a score of -0.400, could impact pricing strategies and necessitate effective hedging strategies to mitigate risks. The current weather outlook indicates high heating demand across all regions, which may provide a temporary boost in natural gas demand.
For Consumers (Industrial/Utilities):
Consumers should prepare for potential cost fluctuations as the market sentiment remains bearish. The strong heating demand, reflected in the weather outlook, may lead to increased natural gas prices. The fundamental balance indicates a tightening supply, which could affect supply reliability. It is advisable for consumers to evaluate their procurement strategies and consider hedging to protect against price spikes.
For Commodity Professionals (Analysts, Consultants):
The market picture is characterized by a bearish sentiment overall, with a score of -0.267. Key driving factors include a significant negative fundamental balance and a prevailing high heating demand. The technical indicators are neutral, indicating a lack of clear direction. Analysts should closely monitor geopolitical developments and weather patterns as these could shift the outlook. The ML forecast suggests a potential short-term price increase, but the underlying bearish sentiment remains a concern.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.