Natural Gas Update December 18,2025

Overview

Natural Gas--NG is up 12.0 cents at $4.144
NG futures are continuing the rally seen yesterday. Some short covering is in effect. Also supportive is the colder forecast seen. Also, today's EIA gas storage data is seen reducing the surplus to the 5 year average.

Forecaster Atmospheric G2 said Wednesday that forecasts shifted colder in the East and not as warm in the southern states for December 27-31. (Barchart)

The WSJ survey estimate for the EIA gas storage number due out today is calling for a draw of 169 BCF. Last year saw a draw of 131 BCF and the 5 year average draw is 96 BCF.

Open interest data from the CME for Wednesday's trading in NG futures showed a decrease of 19,290 contracts. Short covering we believe was at work with declines in the January, March, April, October and November contracts.

Norwegian pipeline gas nominations to Europe are currently at around 347 million cubic meters (mcm) per day marking their highest level since August 2024, data from infrastructure operator Gassco showed. The weather forecast for Europe shows chilly temperatures for Christmas and the days after, as per Celsius Energy reporting. ING reports that the latest positioning data continues to indicate that speculators are increasingly bearish on the European gas market. Investment funds sold a further 7.9TWh in TTF over the last reporting week, leaving them with a net short of 92.8TWh. This is the largest net short since early 2020.

Today, in the TTF options on the CME the April through September Euro 20 puts traded Euro 2.00 with 0.40 delta futures buys at Euro 25.825. In the TTF options on the CME Wednesday, the Euro 23 and 29 puts were purchased against selling of 3 of the Euro 26 puts. The wing buyer paid .475 Euros. The trade included .20 delta February TTF futures sold at Euro 27.10. Today, the February TTF futures are trading 27.02 Euro/Mwh. Also seen on the CME in TTF options trades Wednesday, the April through September strip's Euro 30 call was bought at a cost of 1.35 Euro with 0.29 delta futures sales in the strip at Euro 26.00. That strip settled between 25.73 and 26.13 Euros on Wednesday.

In the LN/NG options trading seen Wednesday, the March April 2026 CSO 10 cent call was sold versus buying of the flat call in some volume; the call spread traded 2.0 cents. The 10 cent March April call was also bought versus selling of the 25 cent call at a cost of 1.0 cents. The March April 2026 futures spread settled Wednesday at +1.7 cents. The April $3.00 and $4.00 call open interest rose quite a bit. Both of those options were a part of a butterfly trade. The $3.00/$4.00/$5.00 April call butterfly traded 26.7 cents. Additionally, the April $4.00 call was sold two times versus buying of one $3.25 call, with the trade going 8.7 cents. The April futures settled Wednesday at $3.316. The January $3.25 put open interest rose by 4,698 contracts Wednesday as per CME data. One trade seen in that option was the January $3.50/$3.25 put spread that went 0.75 cents. The March April 2027 spread's minus 10 cent put traded 1.8 cents. The March April 2027 futures spread settled Wednesday at 31.2 cents. The February $6.00 call open interest on the CME rose by 3,357 contracts; the February $6.00/$7.00 call spread traded 2.2 cents. The January February CSO 25/40/50 cent call butterfly traded in size at a cost of 2.5 cents to the buyer of the wings. The January February 50 cent call also traded in volume, as it was sold versus buying of the 35 cent call in a trade that cost 1.5 cents. And the 50 cent call was bought against selling of the $1.00 call in the January February CSO; the spread traded 1.0 cents. The January February futures spread settled Wednesday at 25.0 cents.

Momentum for the NG futures has turned positive from an oversold condition. Resistance for the January futures comes in at 4.257-4.259 and then at 4.319-4.321. Support comes in at the overnight low at 4.050-4.052 and then at 3.913-3.920.

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