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
2026-01-03 23:48
Table of Contents
Brian's Thoughts
Today's Update
Natural gas prices are experiencing downward pressure, currently trading around $3.87, with fair value estimated closer to $3.75. Recent above-normal weather forecasts have softened demand, leading to a dip in futures. Hedge funds are slightly shifting short, signaling bearish sentiment. The volatile winter weather could still surprise, potentially pushing prices towards $4.20 with favorable conditions. However, international LNG markets are weakening, raising concerns for spring demand. Keep an eye on daily weather updates to navigate this dynamic market.
Executive Summary
Total supply increased by 0.7 BCFD | Total demand increased by 16.0 BCFD | Market is undersupplied by 22.82 BCFD
Technical Analysis
Overall Technical Score (-5 to +5):
1
(Neutral)
Current Price:
$3.62
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $4.1
MA(20): $4.28
Current Price is 3.62, 9 day MA 4.1, 20 day MA 4.28
MACD (12, 26, 9)
BEARISH
MACD: -0.1197
Signal: -0.0508
Days since crossover: 3
MACD crossed the line 3 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 38.68
Category: NEUTRAL
RSI is 38.68 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 132,231
Avg (20d): 181,586
Ratio: 0.73
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 4.75
%D: 8.12
Stochastic %K: 4.75, %D: 8.12. Signal: oversold
ADX (14)
WEAK TREND
ADX: 22.03
+DI: 23.62
-DI: 27.95
ADX: 22.03 (+DI: 23.62, -DI: 27.95). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -95.25
Williams %R: -95.25 (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 | 109.9 | 109.7 | 104.0 | 103.07 |
| LNG Imports | 0.0 | 0.0 | 0.0 | 0.07 |
| Canadian Imports | 6.0 | 5.5 | 6.8 | 6.13 |
| Total Supply | 115.9 | 115.2 | 110.8 | 109.23 |
| Industrial Demand | 23.6 | 21.3 | 25.4 | 25.3 |
| Electric Power Demand | 34.7 | 32.9 | 35.2 | 34.07 |
| Residential & Commercial | 47.0 | 35.1 | 38.9 | 40.97 |
| LNG Exports | 18.8 | 18.3 | 14.8 | 14.03 |
| Mexico Exports | 5.8 | 6.3 | 6.2 | 5.93 |
| Pipeline Fuel | 8.83 | 8.83 | 7.8 | 7.83 |
| Total Demand | 138.72 | 122.72 | 128.3 | 128.17 |
| Supply/Demand Balance | -22.82 | -7.52 | -17.5 | -18.93 |
Weather Analysis
Natural Gas Weather Impact:
LOW heating demand - mild conditions
(Heating-dominated conditions driving natural gas demand)
Weather Analysis Summary
Heating Degree Days (Utility Gas Weighted)
Last 7 Days:
32.0 HDD
+2.0 vs Normal
Next 7 Days:
167.0 HDD
-49.0 vs Normal
Cooling Degree Days (Population Weighted)
Last 7 Days:
0.0 CDD
+0.0 vs Normal
Next 7 Days:
1.0 CDD
+1.0 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 |
|---|---|---|---|
| 01/01 | 32.0 | 30.0 | +2.0 |
HDD Forecast
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 01/03 | 29.0 | 30.0 | -1.0 |
| 01/04 | 29.0 | 30.0 | -1.0 |
| 01/05 | 27.0 | 31.0 | -4.0 |
| 01/06 | 22.0 | 31.0 | -9.0 |
| 01/07 | 20.0 | 31.0 | -11.0 |
| 01/08 | 20.0 | 32.0 | -12.0 |
| 01/09 | 20.0 | 31.0 | -11.0 |
Recent CDD Data
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 01/01 | 0.0 | 0.0 | +0.0 |
CDD Forecast
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 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 |
| 01/07 | 0.0 | 0.0 | +0.0 |
| 01/08 | 1.0 | 0.0 | +1.0 |
| 01/09 | 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
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
98.42
Daily:
0.14 (0.14%)
Weekly:
0.4 (0.41%)
US_10Y
4.19
Daily:
0.02 (0.58%)
Weekly:
0.05 (1.23%)
SP500
6858.47
Daily:
12.97 (0.19%)
Weekly:
-71.47 (-1.03%)
VIX
14.51
Daily:
-0.44 (-2.94%)
Weekly:
0.91 (6.69%)
GOLD
4314.4
Daily:
-11.2 (-0.26%)
Weekly:
-214.7 (-4.74%)
COPPER
5.64
Daily:
0.01 (0.18%)
Weekly:
-0.13 (-2.19%)
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 9.700 USD/MMBtu (+0.095). JKM is trading at a premium of 0.222 to TTF, indicating strong Asian demand.
TTF Prices
9.478
+0.000Front month: JAN 26
As of 2026-01-03
JKM Prices
9.700
+0.095Front month: FEB 26
As of 2026-01-03
JKM-TTF Spread
0.222
2.34%JKM is trading at a premium to TTF, indicating strong Asian demand.
As of 2026-01-03
Forward Curves Visualization
TTF (EUR/MWh)
JKM (USD/MMBtu)
10.4
10.1
9.9
9.6
9.4
TTF Forward Curve (Next 12 Months)
| Month | Price (EUR/MWh) |
|---|---|
| JAN 26 | 9.478 |
| FEB 26 | 9.976 |
| MAR 26 | 9.855 |
| APR 26 | 9.592 |
| MAY 26 | 9.448 |
| JUN 26 | 9.449 |
| JUL 26 | 9.476 |
| AUG 26 | 9.495 |
| SEP 26 | 9.584 |
| OCT 26 | 9.622 |
| NOV 26 | 9.746 |
| DEC 26 | 9.836 |
JKM Forward Curve (Next 12 Months)
| Month | Price (USD/MMBtu) |
|---|---|
| FEB 26 | 9.700 |
| MAR 26 | 9.835 |
| APR 26 | 9.545 |
| MAY 26 | 9.445 |
| JUN 26 | 9.555 |
| JUL 26 | 9.690 |
| AUG 26 | 9.755 |
| SEP 26 | 9.705 |
| OCT 26 | 9.710 |
| NOV 26 | 9.725 |
| DEC 26 | 10.130 |
| JAN 27 | 10.270 |
News & Sentiment Analysis
Market Sentiment Overview
BEARISH
Average Polarity:
-0.467
Confidence:
1.0
Articles Analyzed:
35
Last Updated:
2026-01-03 23:47:56
Commodity Sentiment
CRUDE_OIL
-0.7
HEATING_OIL
0.0
NATURAL_GAS
-0.7
Top News Topics
Supply (1 articles)
Weather (1 articles)
Fibonacci Levels Analysis
Current Price:
$3.62
Closest Support:
$3.51
3.04% below current price
Closest Resistance:
$3.89
7.46% 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:
$3.62
Forecast Generated:
2026-01-03 23:47:57
Next Trading Day:
DOWN 1.45%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-01-03 | $3.57 | $3.1 | $4.03 |
| 2026-01-04 | $3.61 | $3.15 | $4.08 |
| 2026-01-05 | $3.63 | $3.16 | $4.09 |
| 2026-01-06 | $3.62 | $3.15 | $4.09 |
| 2026-01-07 | $3.63 | $3.16 | $4.1 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price decrease of ~1.45% for the next trading day (2026-01-03), reaching $3.57.
- The 5-day forecast suggests a generally upward trend, moving about 1.7% between 2026-01-03 and 2026-01-07.
- The average confidence interval width is ~25.9% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bearish signal, high uncertainty.
AI Analysis
For Energy Traders:
The current market data presents a neutral technical interpretation with a score of 1/5. The Fibonacci levels indicate support at 3.51 and resistance at 3.89.
Given the fundamental balance of -22.82 BCFD (a significant change of -15.30), traders should be cautious of potential price volatility.
The ML price forecast suggests a slight downward trend of 1.45%, indicating short-term opportunities for selling or caution in buying positions. Additionally, the overall bearish sentiment should be factored into trading decisions.
For Producers (Oil & Gas Companies):
The current bearish sentiment in the market, with a sentiment score of -0.467, indicates potential challenges for production planning. The fundamental balance of -22.82 BCFD suggests oversupply, which may pressure prices further.
Producers may need to reconsider their hedging strategies to mitigate risks associated with price declines. The heating demand highlighted in the weather outlook may provide some relief, but overall market sentiment remains a critical factor affecting operations.
For Consumers (Industrial/Utilities):
Consumers should prepare for potential cost fluctuations given the bearish market sentiment and a fundamental balance indicating oversupply. The high heating demand expected due to the weather outlook may result in increased costs for residential and commercial heating.
It is advisable for consumers to consider procurement strategies that account for potential price volatility, especially as the ML price forecast indicates a downward trend.
For Commodity Professionals (Analysts, Consultants):
The market presents a complex picture characterized by a bearish sentiment and a fundamental balance of -22.82 BCFD. The technical indicators are neutral, but the significant change in balance indicates potential market shifts.
Analysts should focus on the implications of the high heating demand in the weather outlook, which may temporarily support prices despite prevailing bearish sentiments. The ML price forecast suggests a potential for further declines, warranting close monitoring of market dynamics.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.