So - natural gas is one of those lessons in extremes. Right now, we are in the goldilocks part of the story. 5.50 in late december was too big, 3.14 (imho) is too small. 3.599-3.67 feels to be a magnet but the momentum is pulling us further down the vortex. After 3.34 went, there is a lot of technical pull down to 2.70 (ironically where Mar & Apr contracts are trading) - so we have a lot of technical momentum pulling us further down. On the fundamental side, we are bearish right now but is it really that bad??? We are currently only slightly above the 5 year average and in fact we will be 200 bcf over at the end of this warming period - putting everything on February weather, and in all my years of trading Feb holds a LOT of potential cold. Does not mean it will happen but has the possibility to change winter in just one week. All that said we are resting on the Feb contract at 3.14 and with a lot of technical momentum pulling natty down, I think it’s too far too fast and a move back up to 3.599 and 3.67 seem to be in order. The rest of the week is centered at 3.34 as the bull/bear line.
ER
Natural Gas Radar
2026-01-12 23:48
Table of Contents
Brian's Thoughts
Today's Update
Natural gas is currently navigating the "Goldilocks zone," with prices hovering around $3.34, just above the five-year average. Recent cold weather forecasts have sparked a 5% price rebound, suggesting potential upward momentum. However, bearish fundamentals remain, with technical indicators implying a possible dip towards $2.70 if downward pressure continues. As we approach February—often a pivotal month for cold weather—traders should monitor shifts in demand and weather patterns closely, as they could dramatically influence prices.
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:
$3.34
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $3.51
MA(20): $3.86
Current Price is 3.34, 9 day MA 3.51, 20 day MA 3.86
MACD (12, 26, 9)
BEARISH
MACD: -0.2708
Signal: -0.1871
Days since crossover: 9
MACD crossed the line 9 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 38.24
Category: NEUTRAL
RSI is 38.24 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 2,980
Avg (20d): 148,991
Ratio: 0.02
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 12.89
%D: 7.07
Stochastic %K: 12.89, %D: 7.07. Signal: oversold
ADX (14)
WEAK TREND
ADX: 21.01
+DI: 17.87
-DI: 29.6
ADX: 21.01 (+DI: 17.87, -DI: 29.6). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -87.11
Williams %R: -87.11 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 4.64
Middle: 3.86
Lower: 3.07
Price vs BBands (20, 2): below middle. Upper: 4.64, Middle: 3.86, Lower: 3.07
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 (BELOW normal heating demand)
(Heating-dominated conditions driving natural gas demand)
Weather Analysis Summary
Heating Degree Days (Utility Gas Weighted)
Last 7 Days:
164.0 HDD
-54.0 vs Normal
Next 7 Days:
192.0 HDD
-30.0 vs Normal
Cooling Degree Days (Population Weighted)
Last 7 Days:
1.0 CDD
+1.0 vs Normal
Next 7 Days:
0.0 CDD
+0.0 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 |
|---|---|---|---|
| 01/04 | 29.0 | 30.0 | -1.0 |
| 01/05 | 26.0 | 31.0 | -5.0 |
| 01/06 | 23.0 | 31.0 | -8.0 |
| 01/07 | 21.0 | 31.0 | -10.0 |
| 01/08 | 20.0 | 32.0 | -12.0 |
| 01/09 | 21.0 | 31.0 | -10.0 |
| 01/10 | 24.0 | 32.0 | -8.0 |
HDD Forecast
| Date | HDD | Normal | Anomaly |
|---|---|---|---|
| 01/12 | 26.0 | 31.0 | -5.0 |
| 01/13 | 22.0 | 30.0 | -8.0 |
| 01/14 | 22.0 | 31.0 | -9.0 |
| 01/15 | 29.0 | 32.0 | -3.0 |
| 01/16 | 30.0 | 33.0 | -3.0 |
| 01/17 | 31.0 | 33.0 | -2.0 |
| 01/18 | 32.0 | 32.0 | +0.0 |
Recent CDD Data
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 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 | 0.0 | 0.0 | +0.0 |
| 01/09 | 1.0 | 0.0 | +1.0 |
| 01/10 | 0.0 | 0.0 | +0.0 |
CDD Forecast
| Date | CDD | Normal | Anomaly |
|---|---|---|---|
| 01/12 | 0.0 | 0.0 | +0.0 |
| 01/13 | 0.0 | 0.0 | +0.0 |
| 01/14 | 0.0 | 0.0 | +0.0 |
| 01/15 | 0.0 | 0.0 | +0.0 |
| 01/16 | 0.0 | 0.0 | +0.0 |
| 01/17 | 0.0 | 0.0 | +0.0 |
| 01/18 | 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
98.94
Daily:
-0.19 (-0.19%)
Weekly:
0.36 (0.36%)
US_10Y
4.19
Daily:
0.02 (0.38%)
Weekly:
0.01 (0.19%)
SP500
6977.27
Daily:
10.99 (0.16%)
Weekly:
32.45 (0.47%)
VIX
15.12
Daily:
0.63 (4.35%)
Weekly:
0.37 (2.51%)
GOLD
4605.2
Daily:
114.9 (2.56%)
Weekly:
123.0 (2.74%)
COPPER
6.02
Daily:
0.17 (2.83%)
Weekly:
0.01 (0.18%)
CFTC Commitment of Traders Analysis
Natural Gas Positioning (NAT GAS NYME - NEW YORK MERCANTILE EXCHANGE)
Report Date: 2026-01-06
Sentiment: Bearish and Strengthening
Positioning: Normal Range
Open Interest
1,596,169
Change: +62,184
Managed Money
-101,384
Change: -17,419
-6.4% of OI
Producer/Merchant
6,639
Change: +11,945
0.4% of OI
Swap Dealers
147,275
Change: -2,655
9.2% of OI
Other Reportables
-64,175
Change: +6,754
-4.0% of OI
Analysis Rationale (Managed Money):
- Managed Money sentiment: bearish and strengthening
Crude Oil Positioning (WTI-PHYSICAL - NEW YORK MERCANTILE EXCHANGE)
Report Date: 2026-01-06
Sentiment: Bullish and Strengthening
Positioning: Normal Range
Open Interest
1,968,879
Change: +70,622
Managed Money
24,528
Change: +8,785
1.2% of OI
Producer/Merchant
223,120
Change: -12,485
11.3% of OI
Swap Dealers
-293,886
Change: +11,972
-14.9% of OI
Analysis Rationale (Managed Money):
- Managed Money sentiment: bullish and strengthening
LNG Market Analysis
LNG Market Summary
TTF prices increased to 9.680 EUR/MWh (+0.153). JKM prices increased to 9.565 USD/MMBtu (+0.010). JKM is trading at a discount of 0.115 to TTF, suggesting weaker Asian demand.
TTF Prices
9.680
+0.153Front month: FEB 26
As of 2026-01-12
JKM Prices
9.565
+0.010Front month: FEB 26
As of 2026-01-12
JKM-TTF Spread
-0.115
-1.19%JKM is trading at a discount to TTF, suggesting weaker Asian demand.
As of 2026-01-12
Forward Curves Visualization
TTF (EUR/MWh)
JKM (USD/MMBtu)
9.9
9.7
9.5
9.2
9.0
TTF Forward Curve (Next 12 Months)
| Month | Price (EUR/MWh) |
|---|---|
| FEB 26 | 9.680 |
| MAR 26 | 9.532 |
| APR 26 | 9.228 |
| MAY 26 | 9.073 |
| JUN 26 | 9.071 |
| JUL 26 | 9.066 |
| AUG 26 | 9.099 |
| SEP 26 | 9.188 |
| OCT 26 | 9.206 |
| NOV 26 | 9.295 |
| DEC 26 | 9.384 |
| JAN 27 | 9.450 |
JKM Forward Curve (Next 12 Months)
| Month | Price (USD/MMBtu) |
|---|---|
| FEB 26 | 9.565 |
| MAR 26 | 9.450 |
| APR 26 | 9.185 |
| MAY 26 | 9.085 |
| JUN 26 | 9.180 |
| JUL 26 | 9.290 |
| AUG 26 | 9.430 |
| SEP 26 | 9.410 |
| OCT 26 | 9.370 |
| NOV 26 | 9.365 |
| DEC 26 | 9.720 |
| JAN 27 | 9.855 |
News & Sentiment Analysis
Market Sentiment Overview
BULLISH
Average Polarity:
0.45
Confidence:
1.0
Articles Analyzed:
60
Last Updated:
2026-01-12 23:47:43
Commodity Sentiment
NATURAL_GAS
0.6
HEATING_OIL
0.0
CRUDE_OIL
0.75
Top News Topics
Supply (1 articles)
Demand (2 articles)
Geopolitical (5 articles)
- Oil Slips as Traders Weigh Geopolitical Risks Trading Economics
- Oil Makes Weekly Gains in Geopolitically Driven Trade — Market Talk Dow Jones Newswires
- Crude Oil Climbs on Geopolitical Concerns Trading Economics
- Oil Futures Add to Gains on Geopolitical Risk — Market Talk Dow Jones Newswires
- Oil Gains Further With Focus on Geopolitical Risks — Market Talk Dow Jones Newswires
Weather (2 articles)
Fibonacci Levels Analysis
Current Price:
$3.34
Closest Support:
$2.89
13.47% below current price
Closest Resistance:
$3.51
5.09% 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:
$3.41
Forecast Generated:
2026-01-12 23:47:44
Next Trading Day:
DOWN 0.51%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-01-13 | $3.39 | $2.92 | $3.86 |
| 2026-01-14 | $3.37 | $2.9 | $3.84 |
| 2026-01-15 | $3.38 | $2.91 | $3.85 |
| 2026-01-16 | $3.4 | $2.93 | $3.87 |
| 2026-01-17 | $3.38 | $2.91 | $3.86 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price decrease of ~0.51% for the next trading day (2026-01-13), reaching $3.39.
- The 5-day forecast suggests relatively stable prices between 2026-01-13 and 2026-01-17.
- The average confidence interval width is ~27.8% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bearish signal, high uncertainty.
AI Analysis
For Energy Traders:
Current market conditions indicate a neutral technical interpretation with a Fibonacci support level at 2.89 and a resistance level at 3.51. The fundamental balance is notably negative at -22.82 BCFD, suggesting potential supply constraints.
With a ML price forecast indicating a projected decline of 0.51%, traders should be cautious of short-term volatility. The heating demand driven by colder weather could provide short-term opportunities for upward price movements, especially in regions with significant heating degree days (HDD).
For Producers (Oil & Gas Companies):
The current market sentiment for supply is negative, which may impact production planning. The fundamental balance indicates a significant decrease, highlighting potential supply risks. Producers should consider adjusting their hedging strategies to mitigate risks associated with fluctuating prices and ensure stable revenue streams.
With high heating demand expected due to the weather outlook, maintaining production levels to meet this demand will be crucial, particularly in regions experiencing extreme heating needs.
For Consumers (Industrial/Utilities):
Given the high heating demand forecasted, consumers should prepare for potential cost fluctuations in natural gas and heating oil. The negative fundamental balance suggests that supply may tighten, leading to increased prices. It is advisable for consumers to closely monitor the weather outlook and consider procurement strategies that hedge against rising costs.
As heating demand remains high, ensuring reliable supply will be critical to avoid disruptions during peak usage periods.
For Commodity Professionals (Analysts, Consultants):
The current market shows a bullish sentiment overall, particularly in crude oil and natural gas sectors. However, the fundamental balance is concerning with a significant negative shift, indicating potential supply issues. Analysts should focus on the interplay between weather forecasts and market sentiment, as colder temperatures are likely to drive heating demand.
Monitoring geopolitical risks and their impact on supply will be essential, as they could shift market dynamics rapidly. The ML price forecast suggests a downward trend, which could influence market strategies in the short term.
Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Please consult a financial advisor for specific investment guidance.