Natural Gas Update December 8,2025

Overview

Natural Gas--NG is down 31.2 cents at $4.979
NG spot futures are down sharply as weather models are not cold enough to sustain the recent rally. The market is also down after being technically overbought. US natural gas production remains strong.

Average Lower 48 temperatures are forecast to briefly rise just above normal on Dec. 10 before dropping back below but with a warmer trend suggested after Dec. 17, as per NOAA data. NatGasWeather sees the following demand over the next 15 days: High days 1-2 / Moderate days 3-5 / High days 6-8 / Moderate to low Days 9-15.

US domestic natural gas production is estimated down 0.389 BCF/d today, but is still strong at 113.1 BCF/d, compared to the 30-day average of 112.2 BCF/d, according to BNEF.

Comments heard over the past few days regarding natural gas prices. One technical analyst we respect said : "$5.50 was all it could do. It's still a buy in the 5.00 to 4.90 area."  Another market analyst said:" the technical chart suggests limited upside: Friday's daily candle indicates bullish exhaustion, making a move above $5.500 challenging." While another colleague says: "The models keep shifting colder and colder. If this is correct we will test the $6 option strike next week." He notes that the January $6.00 call  option open interest on the CME is very large; the CME January LN $6.00 call option open interest is 42,495 contracts as of Friday's close. No other January call option has open interest over 29,000 contracts.

Early estimates we have seen for this week's EIA gas storage data are calling for a draw of 169 BCF. This is 2 BCF more than was taken out of storage last year. Yet, it is 80 BCF better than the 5 year average draw for the period.

On Friday, LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 144.4 BCF/d this week to 141.4 BCF/d next week before rising to 143.4 BCF/d in two weeks. The forecasts for "this" week and "next" seen Friday were down a total of 1.3 BCF/d from those seen Thursday.

The January call open interest on the CME rose by a total of 23,682 contracts in Friday's session. The total January put open interest on the CME rose by 46,445 contracts in Friday's activity.  The January $4.80/$4.50/$4.20 put butterfly traded at a cost of 3.6 cents to the buyer of the wings. The January $7.00/$7.50/$8.00 call butterfly traded 0.8 cents to the buyer of the wings. The January $4.75/$4.25 put spread traded 6.2 cents with delta penultimate day futures buys at $5.40. The January, February and March $15.00 calls traded 0.8 cents. In the March April CSO, the 25 cent/50 cent call spread traded 3.1 and 3.2 cents. The March April futures spread settled Friday at a 5 month high at 20.0 cents. In the October 2026 options, the $2.75/$2.25 put spread went in a 1 by 2 ratio with the $2.75 put buyer paying 1.5 cents. The October 2026 futures settled at $4.398 on Friday.

The Baker Hughes gas rig count fell by 1 unit in Friday's report.

The NG spot futures ended the week up 9.05%. The contract has been up 7 weeks in a row. We see a few technical elements that reinforce that a peak in NG spot futures occurred Friday. CME NG futures volume was 1,093,353 contracts. Tops and bottoms are punctuated by large volume. The DC and Weekly chart momentums have turned negative from an overbought condition. Last week, the Weekly chart momentum was 100 by 100, as overbought as the indicator could get. The NG spot futures settled again Friday with a mean reversion setup. The DC chart's upper bollinger band lies at $5.210.

NG spot futures support at 5.024-5.027 has been broken this morning. Below that support is seen at 4.942-4.945. Resistance comes in at 5.134-5.140 and then at 5.226-5.229. The overnight high is 5.205.

Enjoyed this article?

Subscribe to never miss an issue. Daily updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.

Click below to view our other newsletters on our website:

Daily Energy Market Update

Ethanol Report

Fuel and Freight Daily Report

Disclaimer

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.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC