Natural gas tells a similar story. Despite recent volatility, production remains near 110 Bcf/d, storage is projected to run ~200 Bcf looser than the five-year average, and European gas prices are down nearly 45% year-over-year, signaling global abundance. This week is about reconciling price behavior with balance-sheet reality and understanding which forces actually have the mass to move markets. This winter has been the story of strong forecasts and the market trades up, then real weather comes in falling short of the strong forecasts while traders forget and look at the next forecast. Well, as everything works in natural gas - it works until it doesn’t…after the turn of the year traders brought the previous level of 5.50 down to the reasonable level of 3.449. While I felt 4.50+ was too high, I feel like 3.449 is too low and a retracement to 3.75 is closer to fundamental parity. For now, I am watching the gap fill to 3.599 and likely return to 3.67 while waiting on forecasts.
ER
Natural Gas Radar
2026-01-05 23:48
Table of Contents
Brian's Thoughts
Today's Update
Natural gas prices are feeling the chill as milder weather forecasts weigh heavily on the market, pushing prices to a 10-week low. Current production hovers around 110 Bcf/d, with storage levels running 200 Bcf above the five-year average, indicating a surplus. European gas prices have plummeted nearly 45% year-over-year, reinforcing the global abundance narrative. Despite the recent volatility, a return to around $3.75 seems more aligned with fundamentals than current levels, as traders navigate the gap fill to 3.599 and await clearer forecasts.
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:
$3.46
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $4.05
MA(20): $4.2
Current Price is 3.46, 9 day MA 4.05, 20 day MA 4.2
MACD (12, 26, 9)
BEARISH
MACD: -0.1609
Signal: -0.0728
Days since crossover: 4
MACD crossed the line 4 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 36.51
Category: NEUTRAL
RSI is 36.51 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 3,498
Avg (20d): 171,308
Ratio: 0.02
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 0.55
%D: 1.99
Stochastic %K: 0.55, %D: 1.99. Signal: oversold
ADX (14)
WEAK TREND
ADX: 21.38
+DI: 22.71
-DI: 29.44
ADX: 21.38 (+DI: 22.71, -DI: 29.44). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -99.45
Williams %R: -99.45 (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:
93.0 HDD
+3.0 vs Normal
Next 7 Days:
156.0 HDD
-64.0 vs Normal
Cooling Degree Days (Population Weighted)
Last 7 Days:
0.0 CDD
+0.0 vs Normal
Next 7 Days:
2.0 CDD
+2.0 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 |
| 01/03 | 30.0 | 30.0 | +0.0 |
HDD Forecast
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 01/05 | 25.0 | 31.0 | -6.0 |
| 01/06 | 21.0 | 31.0 | -10.0 |
| 01/07 | 19.0 | 31.0 | -12.0 |
| 01/08 | 20.0 | 32.0 | -12.0 |
| 01/09 | 20.0 | 31.0 | -11.0 |
| 01/10 | 23.0 | 32.0 | -9.0 |
| 01/11 | 28.0 | 32.0 | -4.0 |
Recent CDD Data
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 01/01 | 0.0 | 0.0 | +0.0 |
| 01/02 | 0.0 | 0.0 | +0.0 |
| 01/03 | 0.0 | 0.0 | +0.0 |
CDD Forecast
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 01/05 | 0.0 | 0.0 | +0.0 |
| 01/06 | 0.0 | 0.0 | +0.0 |
| 01/07 | 1.0 | 0.0 | +1.0 |
| 01/08 | 1.0 | 0.0 | +1.0 |
| 01/09 | 0.0 | 0.0 | +0.0 |
| 01/10 | 0.0 | 0.0 | +0.0 |
| 01/11 | 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:
Weaker USD may support 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
98.23
Daily:
-0.19 (-0.19%)
Weekly:
0.19 (0.19%)
US_10Y
4.16
Daily:
-0.02 (-0.53%)
Weekly:
0.05 (1.19%)
SP500
6902.05
Daily:
43.58 (0.64%)
Weekly:
-3.69 (-0.05%)
VIX
14.9
Daily:
0.39 (2.69%)
Weekly:
0.7 (4.93%)
GOLD
4475.8
Daily:
161.4 (3.74%)
Weekly:
150.7 (3.48%)
COPPER
6.07
Daily:
0.43 (7.55%)
Weekly:
0.58 (10.48%)
CFTC Commitment of Traders Analysis
Natural Gas Positioning (NAT GAS NYME - NEW YORK MERCANTILE EXCHANGE)
Report Date: 2025-12-30
Sentiment: Bearish but Weakening
Positioning: Normal Range
Open Interest
1,533,985
Change: -23,664
Managed Money
-83,965
Change: +22,442
-5.5% of OI
Producer/Merchant
-5,306
Change: -4,767
-0.3% of OI
Swap Dealers
149,930
Change: +1,794
9.8% of OI
Other Reportables
-70,929
Change: -21,016
-4.6% of OI
Analysis Rationale (Managed Money):
- Managed Money sentiment: bearish but weakening
Crude Oil Positioning (WTI-PHYSICAL - NEW YORK MERCANTILE EXCHANGE)
Report Date: 2025-12-30
Sentiment: Bullish and Strengthening
Positioning: Normal Range
Open Interest
1,898,257
Change: +34,714
Managed Money
15,743
Change: +4,383
0.8% of OI
Producer/Merchant
235,605
Change: -9,543
12.4% of OI
Swap Dealers
-305,858
Change: +7,474
-16.1% 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 2026-01-05
JKM Prices
9.700
+0.095Front month: FEB 26
As of 2026-01-05
JKM-TTF Spread
0.222
2.34%JKM is trading at a premium to TTF, indicating strong Asian demand.
As of 2026-01-05
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:
-0.367
Confidence:
1.0
Articles Analyzed:
64
Last Updated:
2026-01-05 23:48:08
Commodity Sentiment
CRUDE_OIL
-0.4
HEATING_OIL
0.0
NATURAL_GAS
-0.7
Top News Topics
Supply (8 articles)
- Crude Rallies as OPEC+ Keeps Output Levels Unchanged in Q1 Barchart
- Any Change to Venezuelan Oil Supply Less of a Driver for U.S. Treasurys — Market Talk Dow Jones Newswires
- Venezuela's Oil Won't Add Much to Rising Supply — Market Talk Dow Jones Newswires
- 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
Demand (1 articles)
Geopolitical (2 articles)
Weather (1 articles)
Fibonacci Levels Analysis
Current Price:
$3.46
Closest Support:
$2.89
16.47% below current price
Closest Resistance:
$3.51
1.45% 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:
$3.52
Forecast Generated:
2026-01-05 23:48:09
Next Trading Day:
UP 1.52%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-01-06 | $3.58 | $3.11 | $4.04 |
| 2026-01-07 | $3.59 | $3.12 | $4.06 |
| 2026-01-08 | $3.58 | $3.12 | $4.05 |
| 2026-01-09 | $3.59 | $3.12 | $4.06 |
| 2026-01-10 | $3.6 | $3.13 | $4.06 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price increase of ~1.52% for the next trading day (2026-01-06), reaching $3.58.
- The 5-day forecast suggests relatively stable prices between 2026-01-06 and 2026-01-10.
- The average confidence interval width is ~26.0% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bullish signal, high uncertainty.
AI Analysis
For Energy Traders:
Current market conditions indicate a neutral sentiment with a fundamental balance of -22.82 BCFD, suggesting potential volatility in prices. Key Fibonacci support is at 2.89 and resistance at 3.51. The ML price forecast indicates a potential increase of 1.52% with a range of 3.11 to 4.04. Traders should monitor for short-term opportunities around these levels while being cautious of the bearish overall market sentiment.
For Producers (Oil & Gas Companies):
The bearish sentiment in the market, particularly around natural gas with a score of -0.700, may impact production decisions. The fundamental balance indicates a significant drop, which could affect supply strategies. Producers should consider hedging strategies to mitigate risks associated with fluctuating prices and high heating demand in the residential and commercial sectors, especially in the Northeast and Midwest regions.
For Consumers (Industrial/Utilities):
With the weather outlook showing high heating demand (HDD: 22.4) and low cooling demand, consumers should prepare for potential cost fluctuations in heating fuels. The bearish market sentiment, alongside a negative fundamental balance, suggests that supply reliability may be at risk. Procurement strategies should be adjusted accordingly to hedge against price volatility and ensure stable supply during peak demand periods.
For Commodity Professionals (Analysts, Consultants):
The current market landscape is characterized by a bearish sentiment across multiple commodities, particularly crude oil and natural gas. The fundamental balance of -22.82 BCFD combined with high heating demand indicates a tightening supply situation. Analysts should focus on the implications of geopolitical risks and their effects on market dynamics, as well as monitor the ML price forecasts for any potential shifts in outlook.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.