Natural Gas Update December 4, 2025

Overview

Natural Gas---NG is down 4.9 cents at $4.946
Natural gas futures are lower now after climbing overnight to a fresh multi year high as cold weather forecasts continued to boost sentiment. But, some question whether the storage surplus to the 5 year average, which will widen today, is a possible headwind for the contract. Technically the contract is getting overbought.

The EIA storage data is seen as a draw of 14 to 18 BCF as per WSJ and Reuters surveys. This compares to last year's draw of 26 BCF and the 5 year average draw of 43 BCF.   "Forecasts for the coldest December since 2010 may tip storage into a deficit by Christmas," trading firm EBW Analytics wrote in a note to clients. (WSJ)

Demand for heating is likely to remain strong "as a frosty weather system tracks across the northern" U.S., NatGasWeather wrote Wednesday.

Open interest in NG futures on the CME rose by 24,205 contracts in Wednesday's trading. The whole strip from March 2026 to April 2027 saw increases. We see this as mostly new longs being established.

The TTF European gas spot futures fell today to their lowest value since April 10,2024. Since January, European gas prices are down more than 45%. As of November 30, European inventories were 75% full, roughly 10% below the five-year average. In Germany, Europe’s largest gas market, storage levels are even weaker at just 67%, more than 20% below seasonal norms. With Asian demand relatively weak and US export capacity strong, Europe has become the primary destination for American LNG. The strong inflow of LNG into Europe is seen as the main driver to falling prices. Goldman Sachs expects rising global supply — particularly from the US — to lift European storage levels and gradually push TTF and prices lower, forecasting TTF at €29/MWh in 2026 and €20/MWh in 2027. Goldman adds that by 2028–2029, storage congestion in Northwest Europe could drive TTF as low as €12/MWh, closing the US LNG export arbitrage and forcing cancellations of American cargoes. Today, TTF spot futures are trading Euro/Mwh 27.420, which equates to $9.38/MMBtu. The contract has been sliding along the lower bollinger band for the past 10 sessions. Momentum is near oversold. Support is seen at 27.165 and then at 26.160 Euro/ Mwh from data from April, 2024. The best upside resistance we see lies at Euro/Mwh 30.255.

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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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