Natural Gas Update December 11,2025

Overview

Natural Gas--NG is down 16.5 cents at $4.430
NG futures are lower as the market has been consumed the past few days with a weaker late December weather pattern. This is the complete opposite of the concern for very cold air in December that led to a sharp rally last week in NG prices.

Meteorologists forecast weather across the country would remain mostly warmer than normal through December 25, reducing the amount of gas needed to heat homes and businesses. (Reuters)

Today's EIA gas storage data is seen as a draw of 166 to 173 BCF as per news wire surveys. This compares to last year's draw of 89 BCF and the 5 year average draw of 167 BCF. One colleague suggests that this strong draw is priced in the market already. 

On Wednesday, LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 145.3 BCF/d this week to 144.8 BCF/d next week. These forecasts were a total of 0.3 BCF/d more than seen Monday.

US domestic natural gas production was estimated at 113.1 BCF/d yesterday compared to the 30-day average over 112.4 BCF/d, according to BNEF.

NG/LN options trades from Wednesday's activity included the March April of 2027 CSO with the 50 cent put bought against selling of 2 of the 25 cent puts. The 50 cent put buyer collected 1.5 cents. The March April 2027 futures spread settled 38.7 cents. In the February March CSO, the 35 /25 cent put spread traded 5.0 cents. The February March futures spread settled 53.6 cents. The January February CSO 25/15 cent put spread traded 2.7 cents. The January February futures spread settled 35.3 cents. The March April 2026 CSO minus 5 cent put traded 2.7 and 2.8 cents. Additionally in the March April 2026 CSO, the $2.00 call traded 1.2 cents. The March April 2026 spread settled +6.4 cents. The January $4.25 put open interest rose by 4,894 contracts. In one trade, twice as many of the $4.25 puts were sold against buying of the $4.75 put for a cost of 14.3 cents to the higher strike put buyer, with .08 delta futures bought at $4.61.

Technically NG futures have negative momentum basis the DC chart. Support for the spot futures at 4.429-4.443 has been pierced this morning. Below this light support is seen at 4.385-4.390. Below that support is seen at 4.311-4.320. Resistance above comes in at 4.622-4.629, which was tested with the overnight high of 4.631.

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