Natural Gas Update September 24,2025

Overview

Natural Gas---November NG is down 0.8 cents at $3.132.
NG futures are slightly lower after yesterday's gains for the October and November contracts. As one comment said "yesterday's rally was fragile" due to easing seasonal demand heightening the risk of a winter oversupply. NGI commentary this morning cites a more bearish weather pattern and a somewhat bearish EIA gas storage number due tomorrow for the pullback in prices overnight.

Reasons given for Tuesday's rally were a warmer forecast across the central and northern US for September 28-October 2 (Barchart),  profit taking, dip buying, an oversold condition, and technical support. Notable in Tuesday's settlements is the fact that the October contract was up 4.7 cents, November was up 4.3 cents and December settled up 0.3 cents. Then until the February 2027 contract, the futures settled lower. To us, the October higher settlement was due to short covering/profit taking and the upcoming expiration this Friday.

Celsius Energy says that the natural gas share of power generation rose this past week to the second best for the period in the last 5 years. We heard 2 reasons for this rise. One was that the lower gas price induced natural gas us. Another one cited lower wind generation in the period.

Tuesday's NG rally came even as feed gas volume was lower. Gas flow into the largest U.S. liquefied natural gas (LNG) plant fell nearly 0.6 BCF/d on Tuesday from Monday, short of peak demand by 1.4 BCF/d, according to preliminary data from financial firm LSEG. Cheniere Energy’s Sabine Pass plant in Texas, which can pull over 5 BCF/d of natural gas to convert into LNG, was down to 3.8 BCF/d from 4.4 BCF/d on Monday, suggesting at least one of its processing plants, which are called trains, could be offline, LSEG data showed. Cheniere is the largest exporter of the superchilled gas in the U.S.

The next day cash Henry Hub gas price was seen trading Tuesday mid-morning at $2.875 with the October spot futures at a roughly 5 cent discount at the $2.82 area. Given that often cash and futures price converge at expiration, the stronger cash price may have supported some of the October futures rally Tuesday.

Euro 50 call options on the TTF contract were traded on Monday for April to September 2026, data compiled by Bloomberg showed on Tuesday. Over 2,000 lots of the options traded at a cost of 0.81 Euro. Volatility in European natural gas prices has fallen to its lowest since before the 2022 energy crisis. (Bloomberg) The options thus suggest a near 60% increase in prices as today, the April through September strip is worth about Euro 31.3/Mwh. Recently,  the European Union took a step to bring forward a ban on imports of Russian LNG a year earlier than planned—to January 1, 2027.  In the front end of the TTF curve, European gas benchmarks remain rangebound as returning Norwegian supply offsets Russian supply risks. “The pipeline gas export from Norway is on the rise again after heavy maintenance during the first half of September,” analysts at DNB Carnegie say. “LNG import to northwest Europe is also exceptionally strong for the season and massively up year-on-year.” Meanwhile, European gas demand is down 29% compared with a year earlier, while inventories are nearly 82% full. This is above the bloc’s Nov. 1 filling target. (WSJ) The spot October TTF contract is trading just above Euro 32/ Mwh.

Technically, the November NG futures still have negative momentum, but currently there are 2 elements that are supportive. The mean reversion setup from Monday was confirmed Tuesday with the contract settling back over the daily chart's lower bollinger band. That lower band today lies at 3.080.  Secondly, at current, the November contract is holding over the lows at 3.093/3.095 seen almost one month ago. Support below that lies at 3.046-3.051 from DC chart data. Yesterday's November low was 3.055. Resistance is seen at 3.164-3.170 and then at 3.2333-3.2341.

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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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