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
2026-01-01 23:48
Table of Contents
Brian's Thoughts
Today's Update
Natural gas prices have hit a 10-week low amidst ample supply and unseasonably warm temperatures in the U.S. The market sentiment is bearish, with hedge fund positioning showing a slight shift to the short side. Current fair value is around $3.75, aligning closely with February contract prices. While weather dynamics could surprise demand in the coming winter months, recent forecasts suggest a soft LNG market. Traders should monitor weather updates and inventory reports closely, as volatility remains high amid changing conditions.
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:
$3.63
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $4.1
MA(20): $4.28
Current Price is 3.63, 9 day MA 4.1, 20 day MA 4.28
MACD (12, 26, 9)
BEARISH
MACD: -0.1187
Signal: -0.0506
Days since crossover: 3
MACD crossed the line 3 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 38.85
Category: NEUTRAL
RSI is 38.85 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 10,128
Avg (20d): 175,718
Ratio: 0.06
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 5.79
%D: 8.47
Stochastic %K: 5.79, %D: 8.47. Signal: oversold
ADX (14)
WEAK TREND
ADX: 22.03
+DI: 23.66
-DI: 27.99
ADX: 22.03 (+DI: 23.66, -DI: 27.99). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -94.21
Williams %R: -94.21 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 5.16
Middle: 4.28
Lower: 3.39
Price vs BBands (20, 2): below middle. Upper: 5.16, Middle: 4.28, Lower: 3.39
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 (ABOVE normal heating demand)
(Mixed heating and cooling conditions)
Weather Analysis Summary
Heating Degree Days (Utility Gas Weighted)
Last 7 Days:
105.0 HDD
+21.0 vs Normal
Next 7 Days:
188.0 HDD
+19.0 vs Normal
Cooling Degree Days (Population Weighted)
Last 7 Days:
105.0 CDD
+21.0 vs Normal
Next 7 Days:
0.0 CDD
-12.0 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 |
|---|---|---|---|
| 12/26 | 15.0 | 12.0 | +3.0 |
| 12/27 | 15.0 | 12.0 | +3.0 |
| 12/28 | 15.0 | 12.0 | +3.0 |
| 12/29 | 15.0 | 12.0 | +3.0 |
| 12/30 | 15.0 | 12.0 | +3.0 |
| 12/31 | 15.0 | 12.0 | +3.0 |
| 01/01 | 15.0 | 12.0 | +3.0 |
HDD Forecast
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 01/01 | 31.0 | 12.0 | +19.0 |
| 01/02 | 29.0 | nan | +nan |
| 01/03 | 28.0 | nan | +nan |
| 01/04 | 28.0 | nan | +nan |
| 01/05 | 26.0 | nan | +nan |
| 01/06 | 23.0 | nan | +nan |
| 01/07 | 23.0 | nan | +nan |
Recent CDD Data
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 12/26 | 15.0 | 12.0 | +3.0 |
| 12/27 | 15.0 | 12.0 | +3.0 |
| 12/28 | 15.0 | 12.0 | +3.0 |
| 12/29 | 15.0 | 12.0 | +3.0 |
| 12/30 | 15.0 | 12.0 | +3.0 |
| 12/31 | 15.0 | 12.0 | +3.0 |
| 01/01 | 15.0 | 12.0 | +3.0 |
CDD Forecast
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 01/01 | 0.0 | 12.0 | -12.0 |
| 01/02 | 0.0 | nan | +nan |
| 01/03 | 0.0 | nan | +nan |
| 01/04 | 0.0 | nan | +nan |
| 01/05 | 0.0 | nan | +nan |
| 01/06 | 0.0 | nan | +nan |
| 01/07 | 0.0 | nan | +nan |
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
98.22
Daily:
-0.06 (-0.06%)
Weekly:
0.2 (0.21%)
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
4385.2
Daily:
59.6 (1.38%)
Weekly:
-143.9 (-3.18%)
COPPER
5.74
Daily:
0.11 (1.96%)
Weekly:
-0.03 (-0.45%)
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 remained stable to 9.478 EUR/MWh (+0.000). JKM prices increased to 9.605 USD/MMBtu (+0.035). JKM is trading at a premium of 0.127 to TTF, indicating strong Asian demand.
TTF Prices
9.478
+0.000Front month: JAN 26
As of 2026-01-01
JKM Prices
9.605
+0.035Front month: FEB 26
As of 2026-01-01
JKM-TTF Spread
0.127
1.34%JKM is trading at a premium to TTF, indicating strong Asian demand.
As of 2026-01-01
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 | 9.700 |
| MAR 26 | 9.586 |
| APR 26 | 9.368 |
| MAY 26 | 9.246 |
| JUN 26 | 9.259 |
| JUL 26 | 9.275 |
| AUG 26 | 9.304 |
| SEP 26 | 9.396 |
| OCT 26 | 9.437 |
| NOV 26 | 9.574 |
| DEC 26 | 9.672 |
JKM Forward Curve (Next 12 Months)
| Month | Price (USD/MMBtu) |
|---|---|
| FEB 26 | 9.605 |
| MAR 26 | 9.520 |
| APR 26 | 9.265 |
| MAY 26 | 9.240 |
| JUN 26 | 9.360 |
| JUL 26 | 9.480 |
| AUG 26 | 9.600 |
| SEP 26 | 9.560 |
| OCT 26 | 9.565 |
| NOV 26 | 9.605 |
| DEC 26 | 9.985 |
| JAN 27 | 10.130 |
News & Sentiment Analysis
Market Sentiment Overview
BEARISH
Average Polarity:
-0.333
Confidence:
1.0
Articles Analyzed:
60
Last Updated:
2026-01-01 23:47:43
Commodity Sentiment
NATURAL_GAS
-0.6
HEATING_OIL
0.0
CRUDE_OIL
-0.4
Top News Topics
Supply (1 articles)
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:
$3.63
Closest Support:
$3.51
3.31% below current price
Closest Resistance:
$3.89
7.16% 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:
$3.69
Forecast Generated:
2026-01-01 23:47:44
Next Trading Day:
UP 1.04%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-01-01 | $3.72 | $3.25 | $4.19 |
| 2026-01-02 | $3.69 | $3.22 | $4.16 |
| 2026-01-03 | $3.64 | $3.17 | $4.11 |
| 2026-01-04 | $3.69 | $3.22 | $4.16 |
| 2026-01-05 | $3.7 | $3.23 | $4.17 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price increase of ~1.04% for the next trading day (2026-01-01), reaching $3.72.
- The 5-day forecast suggests relatively stable prices between 2026-01-01 and 2026-01-05.
- The average confidence interval width is ~25.5% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bullish signal, high uncertainty.
AI Analysis
For Energy Traders:
The market shows neutral sentiment with a technical score of 1/5. Key Fibonacci support is at 3.51 and resistance at 3.89. The ML price forecast indicates a potential upward movement of 1.04% within a range of 3.25 to 4.19. Traders should watch for volatility around these levels, particularly in light of the high heating demand expected, which may provide short-term opportunities but also risks if demand shifts unexpectedly.
For Producers (Oil & Gas Companies):
The fundamental balance is currently at -7.52 BCFD, indicating a slight tightening in supply. Producers should consider adjusting their production planning in response to the high heating demand forecast, especially in the Northeast and Midwest regions. The neutral sentiment in news may suggest a cautious approach to hedging strategies, while the negative sentiment in supply-related news could indicate potential risks to operational stability. Monitoring geopolitical developments is also crucial, as they could impact crude prices and overall market conditions.
For Consumers (Industrial/Utilities):
With a high heating demand expected, particularly in the Northeast, consumers should prepare for potential cost fluctuations in natural gas and heating oil. The fundamental balance of -7.52 BCFD suggests a tightening market, which could lead to increased prices. Additionally, the neutral sentiment indicates uncertainty in price movements, making it essential for consumers to consider procurement strategies or hedging options to mitigate risks associated with supply reliability.
For Commodity Professionals (Analysts, Consultants):
The current market landscape presents a neutral sentiment with key indicators providing mixed signals. The fundamental balance shows a tightening supply with a score of -7.52 BCFD, while technical indicators remain neutral. Weather forecasts indicate a strong heating demand, especially in the Northeast and Midwest, which are likely to drive short-term price movements. Analysts should focus on the interplay between geopolitical factors and supply sentiment, as these will be critical in shaping market dynamics moving forward.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.