Natural Gas Update December 22,2025

Overview

Natural Gas--NG is down 4.7 cents at $3.939
NG spot futures are lower now, after having originally gapped up overnight as weather models added demand. But, the NOAA 6-14 day forecast still shows warm weather across most of the country, as per Market News reporting. Thus prices have fallen back --well off the overnight high.

The EIA natural gas storage data normally due out Wednesdays will not be released until next Monday December 29 at Noon (EST) due to the fact that the Federal government has made Christmas Eve and the day after Christmas official days off for Federal workers. The report for the week ended December 19 is estimated to show a draw of 170/170.5 BCF as per early estimates seen. Last year saw a draw of 98 BCF for the period and the 5 year average draw for the period is 110 BCF.

US domestic natural gas production is estimated today at 114.0 BCF/d compared to the 30-day average of 113.4 BCF/d, according to BNEF data.

The Baker Hughes natural gas rig count was unchanged in Friday's report. But, we point to the oil rig count dropping by 8 units in Friday's report as having an effect on natural gas going forward due to associated gas production. This notion is elaborated below in Bernstein's view of gas pricing for 2026. 

Friday's settlements for NG futures on the CME showed the January and February contracts ending higher on the session, while the strip from March 2026 through June 2027 ended slightly lower. We wonder if the higher settlement in January was as much about short covering and liquidation of positions due to the shortened holiday trading hours and the impending expiration of the options this Friday and the futures next Monday.

The CFTC COT report issued Friday for the week ended December 9 showed money managers reduced their net short positioning in NG futures/options on the CME by just over 9,000 contracts after in the prior week reducing it by over 25,000 contracts. As of December 9, money managers were net short a total of 30,862 contracts. 

Australia will make exporters of LNG from the country’s east coast keep up to a quarter of their output for domestic use from 2027, under a scheme unveiled on Monday to curb price spikes and help fill a long-forecast supply gap. Australia exports far more gas than it consumes, and the competition regulator warned on Monday that the expected local shortfall had widened, with output dropping from legacy fields off the south coast.  (Reuters)

The investment company Bernstein expects U.S. natural gas markets to regain footing in 2026, reiterating confidence that $5  remains the long-term mid-cycle price. LNG exports are central to that view, with Bernstein pointing out that current U.S. LNG volumes are at record levels, around “5 BCF/d above a year ago,” and that growth forecasts to 2030 are higher than previously expected. With regard to supply, the Haynesville basin is “near 5-year lows in terms of volumes,” with rig counts also depressed and “an 8-month lag between activity and volumes,” meaning much of 2026 supply is already set at lower levels. (Investing.com)

Technically, NG futures remain in the range seen over the past week punctuated by the double top at 4.218 and the double bottom at 3.840 / 3.842. Some light resistance is seen at 4.151-4.158, which was almost tested with the overnight high of 4.140. Some light support comes in at 3.913/3.920. Momentum is trying to turn positive.

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This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

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