Natural Gas Update January 28,2026

Overview

Natural Gas--March NG is down 9.6 cents at $3.724
The March NG futures are lower as the fundamentals are seen moderating slightly next week and some profit taking is likely occurring. Weather forecasts have dialed back some demand today.

The American weather model is giving back a sizable amount of HDD today as per the forecast issued overnight.

Today is the last trading session for the February NG futures contract. There is a very small amount of open positions as of the close Tuesday; this is evidenced in the fact that today's volume for the expiring February contract is extremely low.

One comment seen underscores some of the reasoning for the sharp rally seen the past week or so :""The market is trying to sort out how much of this rally was weather fear versus how much is a true reminder that storage alone does not solve deliverability when pipelines, wellheads, and processing plants are operating in extreme conditions." 

The next day Henry Hub cash price yesterday eased slightly from the day before. In early morning trading the next day cash was quoted $22.00/$26.00, down from the prior day's quote of  $25.00/$28.00. This reflects the heightened demand along certain pipelines and the limited infrastructure to move the desired amounts of gas.  NGI's national spot gas average fell by $28.895 to $18.870 on Tuesday.

Notable options trades seen Tuesday were mainly in the Calendar Spread Options (CSO's). The October January minus $2.00 put traded between 2.5 and 2.8 cents in an opening position. Additionally, in the October January CSO 6,000 lots of the minus 75 cent calls went 6.2 cents and 2,500 lots went 5.8 cents. The October January minus 65 cent call CSO traded 4.2 cents. Both the -75 and -65 cent call trades were closing positions. In the October January CSO, the -$1.00/-$1.50/-$2.00 put butterfly traded 5.2 cents. The October January futures spread settled at -$1.019 Tuesday. In the March April CSO, the 25/50/75 cent butterfly traded 2.8 cents. Another butterfly traded in the March April CSO. The flat/25/50 cents butterfly traded 3.0 cents. The March April futures spread settled at 15.0 cents. The April October -10/-20 cent call spread CSO traded 2.0 cents. This was an opening position. The April October futures spread settled at -41.1 cents. The April October 2026 strip saw the $2.00 puts trade 1.3 cents with 0.03 delta futures buys at $3.83.

Technically the March NG futures' momentum looks to be cresting. Support for the March futures comes in at 3.581-3.585, which was tested overnight with a low of 3.576. Below that support comes in at 3.509-3.515. Resistance above lies at 3.882-3.889.

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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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