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
2026-01-04 23:48
Table of Contents
Brian's Thoughts
Today's Update
Natural Gas prices are facing downward pressure as recent weather forecasts indicate above-normal temperatures across the U.S., dampening demand. The current fair value sits near $3.75, with the February contract trading around $3.87. Despite a slight shift to short positions among hedge funds, winter's unpredictable weather could bring surprises. International LNG markets are softening, raising concerns for spring demand. Traders should monitor weather updates closely, as conditions can rapidly change market dynamics.
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:
$3.45
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $4.04
MA(20): $4.2
Current Price is 3.45, 9 day MA 4.04, 20 day MA 4.2
MACD (12, 26, 9)
BEARISH
MACD: -0.1618
Signal: -0.073
Days since crossover: 4
MACD crossed the line 4 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 36.35
Category: NEUTRAL
RSI is 36.35 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 12,084
Avg (20d): 171,698
Ratio: 0.07
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 3.49
%D: 2.97
Stochastic %K: 3.49, %D: 2.97. Signal: oversold
ADX (14)
WEAK TREND
ADX: 21.52
+DI: 22.43
-DI: 30.28
ADX: 21.52 (+DI: 22.43, -DI: 30.28). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -96.51
Williams %R: -96.51 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 5.08
Middle: 4.2
Lower: 3.32
Price vs BBands (20, 2): below middle. Upper: 5.08, Middle: 4.2, Lower: 3.32
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:
MODERATE heating demand - typical winter conditions
(Heating-dominated conditions driving natural gas demand)
Weather Analysis Summary
Heating Degree Days (Utility Gas Weighted)
Last 7 Days:
63.0 HDD
+3.0 vs Normal
Next 7 Days:
159.0 HDD
-59.0 vs Normal
Cooling Degree Days (Population Weighted)
Last 7 Days:
0.0 CDD
+0.0 vs Normal
Next 7 Days:
4.0 CDD
+4.0 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 |
| 01/02 | 31.0 | 30.0 | +1.0 |
HDD Forecast
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 01/04 | 28.0 | 30.0 | -2.0 |
| 01/05 | 26.0 | 31.0 | -5.0 |
| 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 |
| 01/10 | 23.0 | 32.0 | -9.0 |
Recent CDD Data
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 01/01 | 0.0 | 0.0 | +0.0 |
| 01/02 | 0.0 | 0.0 | +0.0 |
CDD Forecast
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 01/04 | 0.0 | 0.0 | +0.0 |
| 01/05 | 0.0 | 0.0 | +0.0 |
| 01/06 | 1.0 | 0.0 | +1.0 |
| 01/07 | 1.0 | 0.0 | +1.0 |
| 01/08 | 1.0 | 0.0 | +1.0 |
| 01/09 | 1.0 | 0.0 | +1.0 |
| 01/10 | 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
98.76
Daily:
0.34 (0.35%)
Weekly:
0.72 (0.74%)
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
4414.6
Daily:
100.2 (2.32%)
Weekly:
89.5 (2.07%)
COPPER
5.86
Daily:
0.22 (3.85%)
Weekly:
0.37 (6.68%)
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 2026-01-04
JKM Prices
9.700
+0.095Front month: FEB 26
As of 2026-01-04
JKM-TTF Spread
0.222
2.34%JKM is trading at a premium to TTF, indicating strong Asian demand.
As of 2026-01-04
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:
-0.65
Confidence:
1.0
Articles Analyzed:
28
Last Updated:
2026-01-04 23:47:46
Commodity Sentiment
CRUDE_OIL
-0.6
NATURAL_GAS
-0.7
Top News Topics
Supply (5 articles)
- Oil Declines on Oversupply Worries After Maduro's Ouster — Market Talk Dow Jones Newswires
- Long-Term Stability in Venezuela Could Meaningfully Increase Oil Supply — Market Talk Dow Jones Newswires
- Oil prices likely to move higher on Venezuelan turmoil, ample supply to cap gains Reuters
- Oil Futures Open Year Lower on Oversupply Concerns — Market Talk Dow Jones Newswires
- Oil Steady as Supply Glut Offsets Gulf Tensions — Market Talk Dow Jones Newswires
Weather (1 articles)
Fibonacci Levels Analysis
Current Price:
$3.45
Closest Support:
$2.89
16.23% below current price
Closest Resistance:
$3.51
1.74% above current price
Fibonacci Retracement Levels
0.0
$2.89
Support
0.236
$3.51
Resistance
0.382
$3.89
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:
2026-01-04 23:47:47
Next Trading Day:
DOWN 1.37%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-01-03 | $3.57 | $3.1 | $4.04 |
| 2026-01-04 | $3.62 | $3.15 | $4.09 |
| 2026-01-05 | $3.63 | $3.16 | $4.1 |
| 2026-01-06 | $3.63 | $3.16 | $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 ~1.37% 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:
Current market conditions suggest neutral sentiment with a technical score of -1/5. The Fibonacci support level is at 2.89 and resistance at 3.51. Traders should be prepared for potential price fluctuations as the ML price forecast indicates a decline of 1.37%. Given the bearish overall market sentiment score of -0.650, caution is advised in entering long positions. The convergence of these indicators suggests a short-term opportunity for risk management strategies.
For Producers (Oil & Gas Companies):
The fundamental balance is notably negative at -22.82 BCFD, indicating a market that may experience supply pressure. Producers should consider revising production planning and hedging strategies in response to the bearish sentiment towards natural gas, reflected in a sentiment score of -0.700. Additionally, the weather outlook shows high heating demand across all regions, which could support short-term pricing stability for natural gas, despite the overall bearish market sentiment.
For Consumers (Industrial/Utilities):
With high heating demand expected due to the weather outlook, consumers should brace for potential cost fluctuations in energy procurement. The weather impact summary indicates a significant Heating Degree Days (HDD) of 24.8, suggesting increased reliance on natural gas. However, the bearish sentiment in the market may pose risks to supply reliability, especially with a negative fundamental balance. Consumers are encouraged to explore procurement strategies to mitigate potential price spikes.
For Commodity Professionals (Analysts, Consultants):
The current energy market landscape presents a complex picture with a strong bearish sentiment across multiple indicators. The overall market sentiment score of -0.650 combined with a fundamental balance of -22.82 BCFD suggests that supply concerns may outweigh demand in the near term. Analysts should focus on the implications of high heating demand across regions, as well as the technical resistance and support levels that could influence price movements. The convergence of these factors indicates a potential shift in market dynamics that warrants close monitoring.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.