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
2026-01-06 23:48
Table of Contents
Brian's Thoughts
Today's Update
Natural gas prices have faced downward pressure, sinking to a 10-week low as warmer-than-expected weather forecasts stifle heating demand. Currently, production hovers around 110 Bcf/d, with storage levels projected to exceed the five-year average by 200 Bcf, indicating an oversupplied market. Despite recent volatility, the market's balance suggests a retracement towards 3.75 could be more aligned with fundamentals. Traders are navigating a tricky landscape, balancing forecasts with actual demand and storage realities, while keeping an eye on the evolving weather patterns.
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): $3.99
MA(20): $4.11
Current Price is 3.45, 9 day MA 3.99, 20 day MA 4.11
MACD (12, 26, 9)
BEARISH
MACD: -0.1886
Signal: -0.0952
Days since crossover: 5
MACD crossed the line 5 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 36.27
Category: NEUTRAL
RSI is 36.27 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 5,262
Avg (20d): 163,999
Ratio: 0.03
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 6.88
%D: 7.98
Stochastic %K: 6.88, %D: 7.98. Signal: oversold
ADX (14)
WEAK TREND
ADX: 21.3
+DI: 21.61
-DI: 30.29
ADX: 21.3 (+DI: 21.61, -DI: 30.29). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -93.12
Williams %R: -93.12 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 4.88
Middle: 4.11
Lower: 3.34
Price vs BBands (20, 2): below middle. Upper: 4.88, Middle: 4.11, Lower: 3.34
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:
HIGH heating demand - significant cold spell
(Heating-dominated conditions driving natural gas demand)
Weather Analysis Summary
Heating Degree Days (Utility Gas Weighted)
Last 7 Days:
122.0 HDD
+2.0 vs Normal
Next 7 Days:
154.0 HDD
-66.0 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 |
| 01/03 | 30.0 | 30.0 | +0.0 |
| 01/04 | 29.0 | 30.0 | -1.0 |
HDD Forecast
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 01/06 | 21.0 | 31.0 | -10.0 |
| 01/07 | 20.0 | 31.0 | -11.0 |
| 01/08 | 20.0 | 32.0 | -12.0 |
| 01/09 | 18.0 | 31.0 | -13.0 |
| 01/10 | 20.0 | 32.0 | -12.0 |
| 01/11 | 27.0 | 32.0 | -5.0 |
| 01/12 | 28.0 | 31.0 | -3.0 |
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 |
| 01/04 | 0.0 | 0.0 | +0.0 |
CDD Forecast
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 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 |
| 01/11 | 0.0 | 0.0 | +0.0 |
| 01/12 | 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
98.54
Daily:
0.27 (0.28%)
Weekly:
0.3 (0.31%)
US_10Y
4.18
Daily:
0.01 (0.34%)
Weekly:
0.05 (1.19%)
SP500
6944.82
Daily:
42.77 (0.62%)
Weekly:
48.58 (0.7%)
VIX
14.75
Daily:
-0.15 (-1.01%)
Weekly:
0.42 (2.93%)
GOLD
4476.7
Daily:
39.8 (0.9%)
Weekly:
106.6 (2.44%)
COPPER
6.0
Daily:
0.07 (1.26%)
Weekly:
0.27 (4.74%)
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 decreased to 9.450 EUR/MWh (-0.526). JKM prices decreased to 9.540 USD/MMBtu (-0.160). JKM is trading at a premium of 0.090 to TTF, indicating strong Asian demand.
TTF Prices
9.450
-0.526Front month: FEB 26
As of 2026-01-06
JKM Prices
9.540
-0.160Front month: FEB 26
As of 2026-01-06
JKM-TTF Spread
0.090
0.95%JKM is trading at a premium to TTF, indicating strong Asian demand.
As of 2026-01-06
Forward Curves Visualization
TTF (EUR/MWh)
JKM (USD/MMBtu)
10.0
9.8
9.5
9.2
8.9
TTF Forward Curve (Next 12 Months)
| Month | Price (EUR/MWh) |
|---|---|
| FEB 26 | 9.450 |
| MAR 26 | 9.322 |
| APR 26 | 9.127 |
| MAY 26 | 9.017 |
| JUN 26 | 9.035 |
| JUL 26 | 9.054 |
| AUG 26 | 9.088 |
| SEP 26 | 9.188 |
| OCT 26 | 9.236 |
| NOV 26 | 9.368 |
| DEC 26 | 9.464 |
| JAN 27 | 9.539 |
JKM Forward Curve (Next 12 Months)
| Month | Price (USD/MMBtu) |
|---|---|
| FEB 26 | 9.540 |
| MAR 26 | 9.285 |
| APR 26 | 9.080 |
| MAY 26 | 9.035 |
| JUN 26 | 9.150 |
| JUL 26 | 9.310 |
| AUG 26 | 9.435 |
| SEP 26 | 9.395 |
| OCT 26 | 9.410 |
| NOV 26 | 9.445 |
| DEC 26 | 9.800 |
| JAN 27 | 9.945 |
News & Sentiment Analysis
Market Sentiment Overview
BEARISH
Average Polarity:
-0.4
Confidence:
1.0
Articles Analyzed:
70
Last Updated:
2026-01-06 23:47:55
Commodity Sentiment
CRUDE_OIL
-0.4
NATURAL_GAS
-0.8
HEATING_OIL
0.0
Top News Topics
Supply (10 articles)
- Canada Crude Can Compete With Increased Output From Venezuela, PM Carney Says — Market Talk Dow Jones Newswires
- Venezuela Needs Billions in Investment for Oil-Production Growth — Market Talk Dow Jones Newswires
- Crude Rallies as OPEC+ Keeps Output Levels Unchanged in Q1 Barchart
- Venezuelan Oil Output Increase A Longer-Term Prospect — Market Talk Dow Jones Newswires
- Venezuela Remains Contained Risk as Oil Market Focuses on Excess Supply — Market Talk Dow Jones Newswires
- 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
Demand (3 articles)
Infrastructure (2 articles)
Geopolitical (4 articles)
- Oil Edges Lower on Prospects for Relief of Venezuela-Related Sanctions — Market Talk Dow Jones Newswires
- Crude Rallies on Rising Geopolitical Risks Barchart
- Oil Risk Premium Could Rise on Geopolitical Fallout of Maduro Capture — Market Talk Dow Jones Newswires
- U.S. Military Action Not a Reflection of Fundamental Shift in Foreign Policy — Market Talk Dow Jones Newswires
Weather (2 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:
$3.35
Forecast Generated:
2026-01-06 23:47:55
Next Trading Day:
UP 0.86%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-01-07 | $3.38 | $2.91 | $3.84 |
| 2026-01-08 | $3.37 | $2.9 | $3.83 |
| 2026-01-09 | $3.36 | $2.9 | $3.83 |
| 2026-01-10 | $3.36 | $2.9 | $3.83 |
| 2026-01-11 | $3.37 | $2.91 | $3.84 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price increase of ~0.86% for the next trading day (2026-01-07), reaching $3.38.
- The 5-day forecast suggests relatively stable prices between 2026-01-07 and 2026-01-11.
- The average confidence interval width is ~27.6% 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 an overall sentiment score of -0.400. The technical indicators are indicating a neutral position with Fibonacci support at 2.89 and resistance at 3.51.
The ML price forecast suggests a potential rise of 0.86%, with a range between 2.91 and 3.84. Traders should be cautious of volatility due to the bearish sentiment and consider short-term opportunities near the support level.
For Producers (Oil & Gas Companies):
The fundamental balance is currently at -22.82 BCFD, indicating a tightening supply situation. With a bearish sentiment score of -0.800 for natural gas, producers should consider adjusting production levels accordingly.
Given the high expected heating demand across all regions, producers might want to focus on optimizing output and consider hedging strategies to mitigate price risks associated with the current market sentiment.
For Consumers (Industrial/Utilities):
The weather outlook indicates a high demand for heating with a heating degree day (HDD) of 22.1, suggesting potential cost fluctuations in energy procurement. This may lead to increased prices in the short term.
Consumers should monitor the supply reliability risks stemming from the fundamental balance of -22.82 BCFD and consider hedging options to safeguard against potential price spikes.
For Commodity Professionals (Analysts, Consultants):
The market is currently influenced by a bearish sentiment across most commodities, particularly highlighted by the negative sentiment for crude oil and natural gas. The fundamental balance is showing a significant negative shift, indicating potential supply constraints.
The combination of high heating demand and a bearish sentiment presents a complex picture. Analysts should closely monitor the weather patterns and ML forecasts, as they may indicate shifts in demand and pricing dynamics in the near future.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Please conduct your own research before making any decisions.