Natural Gas Update December 30,2025

Overview

Natural Gas-- NG is up 16.4 cents at $4.150
NG is higher, continuing the strong pattern seen yesterday as weather forecasts are touting cold temperatures in January.

The EIA storage data seen Wednesday for the week ended Friday December 19 showed a draw of 166 BCF. That was 3 to 4 BCF below forecasts. Total storage fell to 3.413 TCF. That was 24 BCF / 0.70% below the 5 year average. Storage fell to 129 BCF/3.64 % below last year's level. The deficit to the 5 year average is seen flipping back to a surplus with the data for the week ended Dec. 26  due out tomorrow at noon (EST). Estimates seen for tomorrow's data are very varied with estimates of -37 to -64 BCF. Last year's draw was 112 BCF and the 5 year average draw is 120 BCF. NGI sees the upcoming draw as weak due to a 26% decline in heating days in the week ended Dec. 26 from the prior week. Wind output rising by 7% and hydro generation up by 10%  in the period are also seen contributing to the weaker storage data, NGI adds.  NGI says that gas power generation for the week fell by 20% from the week before. With a view to storage data in the new year, NGI says that the 5 year average storage withdrawals for the period from January 1 to February 20 averaged 171 BCF/ week.

Monday's LNG feedgas demand rose by +0.4 BCF/d to 18.9 BCF/d, up 4.1 BCF/d versus last year & up over 1 BCF/d from last week’s lows. Monday's demand was just 0.3 BCF/d below the daily record. (Celsius Energy)

Forecaster Atmospheric G2 said that colder-than-normal temperatures are expected across the Northeast for January 3-7. (Barchart) Monday saw the HDD demand for the next 2 weeks rise to 412, from Friday's forecast for a reading of 398. Monday's forecast was above the near normal level of 394 HDD's for the period. (Reuters)

NG demand for this week is seen at 138.4 BCF/d, falling next week to 135.8 BCF/d. These forecasts from LSEG were up a total of 1.4 BCF/d from those seen last Wednesday.

TTF options in the April through September strip traded on the CME on Monday. The strip saw the 26/20 Euro put spread trade in a 1 by 2 ratio at a cost of 1.375 Euros with .32 delta futures buys in the strip at Euro 26.75.

On the CME on Monday,  the February March CSO calls traded actively. The 50 cent/$1.00 /$1.50 call butterfly traded 6.1 cents cost to the wing buyer. The February March $1.00 call open interest rose by almost 10,000 contracts as a result of Monday's trading. The April October 6 month CSO minus 50 cent puts traded actively at prices of 13.2 and 13.3 cents. The April October futures spread settled at minus 55.1 cents on Monday.

January NG futures expired strongly yesterday, boosted by cold forecasts, strong LNG feedgas volumes and a rise in the Henry Hub next day cash price of $1 from that seen late last week. Henry Hub next day cash prices rose to near $4.400 on Monday, up from Friday's average weighted price of $3.31.  January NG futures settled higher by 32.1 cents, while February settled 10.9 cents higher and March settled up 5.6 cents.

Technically NG has positive momentum basis the DC chart. There is a large rollover gap on the DC chart from the January expiration. The gap goes up to 4.351. Support for the now spot February NG futures lies at 3.976 and then at the overnight low at 3.916-3.922. Resistance at 4.132-4.137 has been pierced. Next resistance lies at 4.178-4.183 and then at the 4.27 area.

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