Natural Gas Update November 20,2025

Overview

Natural Gas---December NG is down 4.4 cents at $4.506
NG futures are down as the market pauses for now --awaiting today's EIA storage report that is expected to show the first withdrawal of the season. The market rose quite a bit yesterday on the back of a colder early December forecast.  Strong LNG export demand is also seen having supported prices Wednesday. The question is whether the market is going to try to test the high for the spot futures of 4.688 seen 1 week ago--or whether cash prices behind futures by over 60 cents and ample inventories will hold the contract back.

The EIA storage data is seen as a draw of 13-14 BCF, as per WSJ and Reuters surveys. Last year saw a build of 3 BCF and the 5 year average build for the week is 12 BCF.

NG futures were helped Wednesday by the possibility for a cold snap in mid to late December, based on a BNEF model showing the right conditions for a polar vortex. The GFS and ECMWF forecasts both point to below-average temperatures through December. Forecaster Atmospheric G2 said Wednesday that temperatures shifted colder in the eastern two-thirds of the US later in the November 24-28 period, and forecasts shifted colder in the middle third of the country for November 29-December 3. 

LSEG on Wednesday said that November so far has seen US gas production at a rate of 109.1 BCF/d, which is down from Monday's level of 109.3 BCF/d. US domestic natural gas production is estimated to be down 0.166 BCF/d today to 110.14 BCF/d compared to the 30 day average of 110.25 BCF/d, according to BNEF.

Feedgas demand in November has run at a rate of 18.0 BCF/d, up from Monday's rate of 17.9 BCF/d.  LNG terminal feedgas is estimated to be down by 0. 150 BCF/d  today at 17.94 BCF/d compared to an average of 17.77 BCF/d so far this month.

LSEG forecasts natural gas demand for this week at 116.6 BCF/d and sees the same rate for next week. These forecasts are up a total of 0.3 BCF/d from those seen Monday.

Notable options trades from Wednesday on the CME include the March $7/$10 call spread that traded 4.4 cents in an initiating trade as per open interest data. The January February  calendar call spread (CSO) 50 cent/ $1.00  traded; the 50 cent call was sold against buying of twice as many of the $1.00 calls for a cost of 1.2 cents. The March April CSO $1.00 call traded 6.0 cents in what looks to be a closing of a position basis CME open interest data. The February March CSO 25 cent/10 cent put spread traded in 2 different large trades. One trade saw the 25 cent put bought against selling of 2 of the 10 cent puts for a cost of 4.3 cents. The 25/10 cent put spread also traded in a 1 for 1 ration at a cost of 5.3 cents.

ING reporting shows net long positioning in the TTF futures to have been pared to its lowest level since March 2024. This was driven by fresh shorts, which ING says have reached a record gross position, which they add leaves the market prone to a possible short covering rally in the event of any supply surprises or extended cold snaps over the winter. The possibility for a US peace deal in Ukraine is a negative for the contract, while inventories at 81% is supportive as they are down from a peak of just over 83% in mid-October. The 5-year average for this time of year is 91% full. (Barchart)  Analysts from trading firm Mind Energy wrote the market seemed to be shrugging off approaching cold weather and pipeline constraints from Norway and Algeria. (NGI) Technically TTF prices have been in an overall range for the  past 3 months.

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