Natural Gas Update January 2, 2026

Overview

Natural Gas--NG is down 6.8 cents at $3.618
NG spot futures are down again today as weather demand has been lowered again.

Both the near-term (14 days) & extended-term (44 days) temperature outlook have trended milder over the past 48 hours, driving accumulated GWDDs weaker, as per Celsius Energy commentary. 

The EIA gas storage data seen Wednesday showed a draw of 38 BCF. The EIA data came in about 8 to 12 BCF less than forecast. The EIA data  lowered total gas in storage to 3.375 TCF, which was 35 BCF/1.60 % below last year's level, but saw the deficit to the 5 year average seen one week ago flip to a surplus this week of 58 BCF / 1.75%.

CFTC data released on Dec. 31 showed money managers added a sizable amount to their net short total in options/futures on the CME in the week ended December 23. The net short total rose by 40,183 contracts to 105,906 contracts. This was mostly a result of new shorts having been added. 

Notable trades on the CME seen Wednesday were in the October 2026 January 2027 CSO. The minus 65 cent call was sold and the minus $1.50 put was sold against the purchase of the minus $1.00 put for a cost of 5.0 cents. The minus $1.00 put in the Oct Jan CSO was also bought against the selling of the minus 65 cent call and minus $1.25 put for a total cost of 1/2 cent.

TTF European gas futures are higher today as cold weather blankets the region. The European gas storage deficit has widened to -423 BCF or -14.7%, which is a new 52-week high. Expect the cold air to stick around and for this deficit to reach -500 BCF over the next 2-3 weeks, according to Celsius Energy data. S&P analysis says that Europe entered winter with materially lower storage levels than recent years and needs to pull in significant waterborne LNG volumes through January and February to stay balanced. Another analyst says that the U.S. front-month arbitrage to Northeast Asia via the Cape of Good Hope closed out further this week, pointing more strongly to Europe, while the arbitrage via Panama has also closed out and is pointing once more to Europe. (oedigital.com)

Technically NG futures have negative momentum basis the DC chart. The spot NG futures are at their lowest level since October 29 and are well into the gap created then on the DC chart. That gap goes down to 3.405. The spot NG futures tested the DC chart's 200 day moving average on the low overnight. The 200 day MA lies at 3.564 and the overnight low traded is 3.563, where we see support. Next support basis the February daily chart lies at its recent low at 3.467. Resistance comes in at the overnight high at 3.697-3.700 and then at  3.722-3.730.

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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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