Natural Gas Radar

2025-08-28 17:55

Table of Contents

Brian's Thoughts

Published: 08/28/2025 Focus: Natural Gas
Natural Gas closed off the week and looks destined for 2.449. With gaps existing at 3.449 and 2.449 - adding in the news that supply is on the uptrend (bear in mind it isn’t that much). The bigger story is the lack of power demand and tick down on LNG exports - those are weighing heavily. My end of season storage still sits at 3.8 TCF - but many respected analysts are toggling up to 4 TCF. Key levels to watch: 2.715 (pivot) with 2.66 and 2.525 as support and 2.762 and 2.799 as resistance. Breaking below 2.762 almost guarantees 2.449 gap fill.

Today's Update

Updated: 2025-08-28 17:54:03 Length: 480 chars
Natural Gas prices are currently navigating a turbulent landscape, eyeing a potential dip to 2.449 amid increased supply and waning power demand. Despite recent rallies fueled by lower-than-expected EIA inventory builds, analysts remain cautious, predicting storage levels could reach 4 TCF. Key levels to watch include 2.715 (pivot), with support at 2.66 and 2.525, while resistance sits at 2.762 and 2.799. As winter approaches, the market's balance between supply and demand...

Executive Summary

Total supply increased by 0.5 BCFD | Total demand decreased by 2.0 BCFD | Market is oversupplied by 6.5 BCFD

Technical Analysis

Overall Technical Score (-5 to +5): -2 (Moderately Bearish)
Current Price: $2.99
Signal: Moderately Bearish

Moving Averages (9/20)

BEARISH

MA(9): $2.8

MA(20): $2.89

Current Price is 2.99, 9 day MA 2.8, 20 day MA 2.89

MACD (12, 26, 9)

BULLISH

MACD: -0.1014

Signal: -0.1255

Days since crossover: 2

MACD crossed the line 2 days ago and is in a bullish setup

RSI (14)

NEUTRAL

Value: 51.59

Category: NEUTRAL

RSI is 51.59 (note 70% is overbought and 30% is oversold)

Volume (vs 20d Avg)

HIGHER

Current: 176,427

Avg (20d): 135,410

Ratio: 1.3

Volume is higher versus 20 day average

Stochastic (14, 3)

BULLISH CROSS

%K: 96.83

%D: 55.17

Stochastic %K: 96.83, %D: 55.17. Signal: bullish cross

ADX (14)

WEAK TREND

ADX: 24.49

+DI: 25.45

-DI: 22.89

ADX: 24.49 (+DI: 25.45, -DI: 22.89). Trend: weak trend

Williams %R (14)

OVERBOUGHT

Value: -3.17

Williams %R: -3.17 (overbought)

Bollinger Bands (20, 2)

ABOVE MIDDLE

Upper: 3.13

Middle: 2.89

Lower: 2.64

Price vs BBands (20, 2): above middle. Upper: 3.13, Middle: 2.89, Lower: 2.64

Fundamental Analysis

Category Current (BCFD) Last Week Last Year 3 Yr Avg
Dry Production 107.4 106.7 101.3 100.1
LNG Imports 0.0 0.0 0.1 0.1
Canadian Imports 5.2 5.1 6.4 5.63
Total Supply 112.6 111.9 107.8 105.8
Industrial Demand 21.7 22.1 21.5 21.4
Electric Power Demand 45.7 41.0 43.7 42.37
Residential & Commercial 8.9 9.2 7.9 8.3
LNG Exports 15.5 16.3 12.6 11.93
Mexico Exports 7.3 7.1 6.9 6.23
Pipeline Fuel 7.0 6.9 6.7 6.77
Total Demand 106.1 102.5 99.2 96.97
Supply/Demand Balance 6.5 9.4 8.6 8.83

Weather Analysis

Weather Impact Summary

Overall: COOLING dominated (HDD: 1.6, CDD: 10.0)
Residential/Commercial: LOW heating demand expected
Power Generation: MODERATE cooling demand expected

Regional Weather Patterns

Northeast

Cooling dominated (CDD: 1.5)

Midwest

Heating dominated (HDD: 8.0)

South

Cooling dominated (CDD: 14.5)

West

Cooling dominated (CDD: 32.5)

Degree Days by City

Chicago, IL

Heating Degree Days (HDD): 8.0
Cooling Degree Days (CDD): 0.0
Total HDD: 10.5
Total CDD: 43.5

New York, NY

Heating Degree Days (HDD): 0
Cooling Degree Days (CDD): 2.0
Total HDD: 0
Total CDD: 61.5

Houston, TX

Heating Degree Days (HDD): 0
Cooling Degree Days (CDD): 14.5
Total HDD: 0
Total CDD: 150.0

Los Angeles, CA

Heating Degree Days (HDD): 0
Cooling Degree Days (CDD): 32.5
Total HDD: 0
Total CDD: 239.5

Philadelphia, PA

Heating Degree Days (HDD): 0
Cooling Degree Days (CDD): 1.0
Total HDD: 0
Total CDD: 57.0

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: Stable/lower rates may support demand
Risk Sentiment: Low market volatility/risk appetite

Economic Indicators

USD_INDEX

97.89
Daily: -0.34 (-0.35%)
Weekly: 0.17 (0.17%)

US_10Y

4.21
Daily: -0.03 (-0.73%)
Weekly: -0.05 (-1.24%)

SP500

6501.86
Daily: 20.46 (0.32%)
Weekly: 34.95 (0.54%)

VIX

14.43
Daily: -0.42 (-2.83%)
Weekly: 0.21 (1.48%)

GOLD

3476.9
Daily: 72.3 (2.12%)
Weekly: 102.5 (3.04%)

COPPER

4.54
Daily: 0.13 (2.94%)
Weekly: 0.1 (2.18%)

CFTC Commitment of Traders Analysis

Natural Gas Positioning (NAT GAS NYME - NEW YORK MERCANTILE EXCHANGE)

Report Date: 2025-08-19
Sentiment: Bearish but Weakening
Positioning: Normal Range

Open Interest

1,603,770
Change: -14,321

Managed Money

-36,687
Change: +14,046
-2.3% of OI

Producer/Merchant

-17,771
Change: +12,483
-1.1% of OI

Swap Dealers

105,233
Change: -2,235
6.6% of OI

Other Reportables

-68,401
Change: -22,088
-4.3% of OI

Analysis Rationale (Managed Money):

  • Managed Money sentiment: bearish but weakening

Crude Oil Positioning (WTI-PHYSICAL - NEW YORK MERCANTILE EXCHANGE)

Report Date: 2025-08-19
Sentiment: Bullish but Weakening
Positioning: Normal Range

Open Interest

1,922,821
Change: -88,138

Managed Money

27,445
Change: -21,420
1.4% of OI

Producer/Merchant

297,794
Change: -2,118
15.5% of OI

Swap Dealers

-438,348
Change: +3,854
-22.8% of OI

Analysis Rationale (Managed Money):

  • Managed Money sentiment: bullish but weakening

LNG Market Analysis

LNG Market Summary

TTF prices decreased to 11.219 EUR/MWh (-0.035). JKM prices decreased to 11.310 USD/MMBtu (-0.180). JKM is trading at a premium of 0.091 to TTF, indicating strong Asian demand.

TTF Prices

11.219

-0.035

Front month: SEP 25

As of 2025-08-28

JKM Prices

11.310

-0.180

Front month: OCT 25

As of 2025-08-28

JKM-TTF Spread

0.091

0.81%

JKM is trading at a premium to TTF, indicating strong Asian demand.

As of 2025-08-28

Forward Curves Visualization
TTF (EUR/MWh)
JKM (USD/MMBtu)
12.0
11.6
11.3
10.9
10.6
11.22
11.31
SEP 25
11.14
11.39
OCT 25
11.40
11.71
NOV 25
11.55
11.88
DEC 25
11.61
11.84
JAN 26
11.61
11.48
FEB 26
11.45
10.95
MAR 26
10.88
10.81
APR 26
10.72
10.90
MAY 26
10.68
11.02
JUN 26
10.69
11.11
JUL 26
10.74
11.20
AUG 26
TTF Forward Curve (Next 12 Months)
Month Price (EUR/MWh)
SEP 25 11.219
OCT 25 11.138
NOV 25 11.405
DEC 25 11.551
JAN 26 11.608
FEB 26 11.607
MAR 26 11.449
APR 26 10.882
MAY 26 10.722
JUN 26 10.682
JUL 26 10.694
AUG 26 10.742
JKM Forward Curve (Next 12 Months)
Month Price (USD/MMBtu)
OCT 25 11.310
NOV 25 11.390
DEC 25 11.710
JAN 26 11.875
FEB 26 11.840
MAR 26 11.480
APR 26 10.945
MAY 26 10.815
JUN 26 10.905
JUL 26 11.015
AUG 26 11.110
SEP 26 11.195

News & Sentiment Analysis

Market Sentiment Overview

BULLISH
Average Polarity: 0.5
Confidence: 1.0
Articles Analyzed: 87
Last Updated: 2025-08-28 17:54:52

Commodity Sentiment

CRUDE_OIL

0.6

NATURAL_GAS

0.4

Top News Topics

Supply (14 articles)

Demand (5 articles)

Infrastructure (2 articles)

Geopolitical (7 articles)

Weather (1 articles)

Fibonacci Levels Analysis

Current Price: $2.99
Closest Support: $2.98 0.33% below current price
Closest Resistance: $3.2 7.02% above current price

Fibonacci Retracement Levels

0.0 $2.62
0.236 $2.98 Support
0.382 $3.2 Resistance
0.5 $3.38
0.618 $3.57
0.786 $3.82
1.0 $4.15

Fibonacci Extension Levels

1.272 $4.56
1.618 $5.09
2.0 $5.67
2.618 $6.62

ML Price Prediction

Current Price: $2.87
Forecast Generated: 2025-08-28 17:54:52
Next Trading Day: DOWN 0.92%
Date Prediction Lower Bound Upper Bound
2025-08-28 $2.84 $2.66 $3.02
2025-08-29 $2.86 $2.68 $3.04
2025-08-30 $2.87 $2.68 $3.05
2025-08-31 $2.86 $2.68 $3.05
2025-09-01 $2.85 $2.67 $3.03

ML Insights

  • Forecast generated using ARIMA(5, 1, 0).
  • The model predicts a price decrease of ~0.92% for the next trading day (2025-08-28), reaching $2.84.
  • The 5-day forecast suggests relatively stable prices between 2025-08-28 and 2025-09-01.
  • The average confidence interval width is ~12.7% of the predicted price, indicating model uncertainty.
  • SIGNAL: Weak bearish signal, high uncertainty.

AI Analysis

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For Energy Traders:

Market indicators suggest a moderately bearish sentiment with a score of -2/5. The Fibonacci support level is at 2.98, while resistance stands at 3.2. Given the ML price forecast indicating a potential decrease of 0.92% with a range between 2.66 and 3.02, traders should be cautious of short-term volatility. The overall market sentiment remains positive, but the divergence between sentiment and technical indicators may present opportunities for short positions.

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For Producers (Oil & Gas Companies):

The fundamental balance shows a positive shift at 6.50 BCFD, indicating a slight increase in supply. However, with the moderately bearish technical outlook, producers should consider adjusting production levels to avoid oversupply. The weather outlook suggests low heating demand, particularly in the Northeast and Midwest, which may impact gas sales. Hedging strategies should be revisited to mitigate risks associated with potential price declines.

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For Consumers (Industrial/Utilities):

With the current weather outlook indicating low heating demand and moderate cooling needs, consumers can anticipate stable pricing in the short term. However, the moderately bearish technical indicators and the fundamental balance suggest potential fluctuations in costs. It may be prudent for consumers to consider procurement strategies that account for possible volatility in natural gas prices, especially given the ML forecast for a price drop.

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For Commodity Professionals (Analysts, Consultants):

The energy market currently exhibits a complex interplay of factors. The technical indicators are moderately bearish, contrasting with a strong market sentiment of +0.450, primarily driven by positive news on natural gas prices. The fundamental balance is positive, but regional weather patterns may influence demand variably across the country. Analysts should monitor these divergences closely as they could signal shifts in market dynamics, particularly in response to changing weather forecasts and geopolitical developments.

Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor before making any investment decisions.

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