Natural Gas (NG=F) Winter 2025–2026: From $4.12 Spike To $3.60 Breakdown
Natural gas futures flipped from a weather-driven squeeze to a controlled correction lower. Around 18 December, front-month NYMEX Henry Hub traded close to $4.12 per mmBtu after a 167 Bcf storage withdrawal pulled U.S. inventories down to 3,579 Bcf, roughly 1.7% below last year’s 3,640 Bcf but still about 0.9% above the five-year average of 3,547 Bcf. A few sessions later January NG=F slid to about $3.879 and then tested a retracement low at $3.60 near the 61.8% Fibonacci level at $3.61, while closing a third straight day below the 200-day moving average near $3.75. The contract bounced briefly toward $3.984, up around 1.9% on short covering from support at $3.842, but the structure now is clearly corrective, with $3.60 and then the dense $3.44–$3.48 zone acting as the next meaningful downside areas.
Supply, Storage And LNG: Why Bears Still Control The Fundamental Tape
On fundamentals Natural Gas faces heavy supply and only moderate tightening from winter withdrawals. Working gas at 3,579 Bcf after the 167 Bcf draw no longer enjoys a big surplus but it is not tight, sitting just under 1% above the five-year norm. Regionally the Midwest dropped about 64 Bcf to 966 Bcf, the East drew 46 Bcf to 797 Bcf, and the South Central removed 48 Bcf to 1,242 Bcf, showing that the early-December cold hit demand-sensitive hubs without pushing the national balance into stress. Production is the main weight. Lower-48 dry gas output has been running around 109.5–112.3 Bcf per day in December, close to 9% above last year, and official projections point to U.S. dry gas rising from roughly 103.5 Bcf/d in 2024 to about 107 Bcf/d in 2026. Active gas rigs are holding near the highest levels since 2021, so supply is not backing off. LNG exports are still a strong structural sink, with feedgas to the main U.S. liquefaction plants averaging around 18.5 Bcf/d in December after a record November near 18.2 Bcf/d, and export capacity expected to climb toward 15 Bcf/d in 2025 and 16 Bcf/d in 2026. At the same time, recent data show feedgas slipping a few percent week-over-week and total Lower-48 demand, including exports, running slightly below last year, which is a weak backdrop for a sustained price rally while storage sits above average.
Weather, Curve Structure And The “Widow-Maker” Signal For NG=F
The key short-term bearish driver for NG=F is the weather tape. Ten-to-fifteen-day forecasts lean warmer than normal across major U.S. load centers through the first days of January, cutting expected residential and commercial heating demand just as winter should be tightening the balance. That change is visible in the forward curve. The March–April 2026 spread, the so-called widow-maker that usually reacts violently when late-winter cold collides with low storage, trades at roughly a one-cent premium, signalling that traders are not paying for serious end-winter scarcity. Official projections still place Henry Hub around $3.56 per mmBtu in 2025 and close to $4.01 in 2026, with a winter average of roughly $4.30, while other outlooks cluster between about $3.60 and $4.60 for 2026. The gulf between those estimates and the current subdued winter strip underlines how aggressively the market has discounted extreme winter risk.
Global Benchmarks: TTF, JKM And The External Ceiling On Natural Gas
Outside the U.S., benchmark prices confirm that this winter has not produced a global gas squeeze. Dutch TTF front-month trades near €27.57 per MWh, roughly $9.48 per mmBtu, and Asian LNG marker prices sit in a similar range, both far below crisis territory. European storage remains comfortable around the high-sixty-percent area, and a mix of LNG and pipeline imports is covering demand even as regional weather turns colder. Asia’s LNG imports from the U.S. have fallen versus 2024 as China trims buying, pushing more flexible cargoes into Europe and reinforcing its role as the balancing basin. With overseas benchmarks soft and tanks reasonably full, there is a practical ceiling on how far U.S. Natural Gas can rise on export flows alone. When TTF and JKM ease faster than Henry Hub, U.S. spot cargo margins tighten and the incentive to over-pull from the U.S. system diminishes despite strong liquefaction utilisation.
Project Decisions, Capital Allocation And Long-Cycle Gas Supply
Long-cycle investment decisions are reshaping medium-term gas risk even while front-month NG=F trades the weather and storage tape. In the U.S., the suspension of the Lake Charles LNG export project in Louisiana removes a roughly 16.45-mtpa development from the base case for the next wave of capacity as its sponsor prioritises pipelines and responds to cost inflation and oversupply concerns. That is effectively a tightening signal for the most bearish 2030s oversupply scenarios. In contrast, Qatar’s North Field-linked programme continues to advance, with an offshore contract valued near $4 billion and around $3.1 billion flowing to one key contractor, backing a multi-year build-out that will push significant new LNG volumes into the market later in the decade. Elsewhere a major Middle Eastern producer has secured approximately $11 billion of structured financing tied to future gas output from its Hail and Ghasha development, targeting about 1.8 Bcf/d with a net-zero framing. In the East Mediterranean, an export agreement of roughly $34.67 billion for around 130 bcm of Leviathan gas to Egypt through 2040 highlights how regional pipeline contracts are locking in flows that interact directly with LNG balances. These projects collectively reinforce the message that supply growth is continuing, but they also show that financing, costs and politics can delay or cap the most aggressive expansion paths.
European Policy, Methane Rules And The Evolving Gas Trading Ecosystem
European policy is adding a structural bid to LNG and flexible Natural Gas supply even as near-term prices stay subdued. Lawmakers have approved a staged phase-out of Russian gas, including a halt to Russian LNG imports by the end of 2026 and a full stop to pipeline gas by the end of September 2027. Russia’s share of EU gas imports has already fallen to around 12% from pre-crisis levels, but replacing the remaining volumes locks in a long-term need for LNG, diversified pipelines and high storage coverage. At the same time methane regulation is becoming a trade and compliance issue. Authorities in the U.S. have asked for exemptions from parts of the EU methane regime until 2035 on the grounds of complex supply chains, while Europe is pushing ahead with implementation. That shift pushes producers and traders to focus on emissions tracking and certification if they want continued access to premium demand. On the market side, record volumes in Dutch TTF contracts and plans to extend trading hours indicate that European gas benchmarks are increasingly synchronised with Henry Hub and Asian LNG, feeding into volatility and hedging decisions for NG=F even if the physical flows remain regional.
Short-Term Technical Structure In NG=F: Key Levels And Fib Zones
Technically NG=F is in a confirmed corrective phase. Price has printed several daily closes beneath the 200-day moving average near $3.75 and below a long-term rising trendline, turning both into overhead resistance. The 20-day moving average has already met the 50-day and is on track to cross below it, adding a momentum-driven bearish signal. The recent low at $3.60 sits directly on top of the 61.8% Fibonacci retracement at $3.61 from the prior upswing and remains marginally above the earlier $3.62 swing low, leaving room for a short-term consolidation or bounce. The critical downside level is clear: a decisive break of $3.60 on a closing basis opens the way toward the $3.48–$3.44 support band. That area aligns with a 78.6% retracement of an internal rally and historical resistance from the early-September swing high. Failure of that zone would extend the retracement and force a rethink of the entire 2025 advance. On the upside, bulls need a sustained move above $3.93, last week’s lower swing high, to start neutralising immediate downside pressure. Above that, former support between roughly $4.09 and the 38.2% retracement near $4.15 is the first major resistance cluster, followed by the falling 20-day average around $4.24. As long as Natural Gas trades below that region, any strength looks more like a corrective bounce than the start of a new impulsive leg higher.
Macro Context: Oil Records, Associated Gas And Cross-Commodity Pressure
The wider energy complex is reinforcing the sense of oversupply risk for Natural Gas. U.S. crude production reached around 13.6 million barrels per day in July and is expected to average about 13.5 million barrels per day in both 2025 and 2026. Faster-than-expected ramp-ups in Gulf of Mexico projects and other developments are adding to that profile. Higher oil output tends to bring more associated gas, particularly from liquids-rich shale, which helps explain upward revisions to U.S. dry gas production forecasts and adds another layer of pressure on NG=F. At the same time global crude balances are projected to loosen, with benchmark Brent expected to slide from an average of about $68 per barrel in September to the low-$60s in late 2025 and toward the low-$50s in 2026 as inventories grow. An environment defined by rising liquids output, increasing gas production and softer oil prices is not compatible with a sustained gas spike unless there is a very clear weather or infrastructure shock.
2026 Henry Hub Scenarios: What Forward Curves And Forecasts Are Really Pricing
Forward projections show how compressed today’s risk premium in Natural Gas has become. Government baselines put Henry Hub near $3.56 per mmBtu in 2025 and roughly $4.01 in 2026, with winter 2025–2026 averaging around $4.30 as periodic cold snaps tighten balances. Private forecasts range from around $3.60 for next summer to nearly $4.60 for 2026, and some houses place Dutch TTF near €29 per MWh in the same window, both levels that sit above current winter strip pricing. On the European side, storage modelling suggests EU-27 inventories could exit the 2025–2026 heating season near 36% full, with the outcome highly sensitive to LNG arrivals and pipeline flows. Taken together, these numbers describe a market trading NG=F in the $3.60–$4.10 range as if winter remains largely benign and as if supply growth and LNG build-out proceed smoothly, even though medium-term scenarios still allow for higher average prices if weather, project execution or policy shift in a less friendly direction.
Trading News On Natural Gas (NG=F): Tactical Bearish Bias, Strategic Hold With $3.44–$3.48 As Line In The Sand
From a positioning standpoint the evidence supports a bearish short-term bias with a neutral long-term stance. Front-month NG=F is below the 200-day moving average, short-term trend indicators are turning down, storage is slightly above its five-year norm, U.S. dry gas output is pressing record territory around 109.6–112.3 Bcf/d, and the March–April spread is signalling very little late-winter fear. At the same time, U.S. LNG exports are on track to climb toward 15–16 Bcf/d by 2026, European policy is locking in structural LNG demand, and mainstream 2026 Henry Hub forecasts sit above current spot pricing. That mix argues against a deep multi-year collapse but does not justify chasing rallies here. The cleaner expression is to treat Natural Gas as a Hold with a tactical sell-the-rally framework. Strength into the $4.09–$4.24 zone, where prior support, Fibonacci resistance and the falling 20-day average converge, is more attractive for reducing risk than for initiating fresh longs as long as price remains capped there. On the downside the $3.60 floor and especially the $3.44–$3.48 band form the strategic line in the sand where longer-horizon participants can reassess whether risk-reward starts to favour accumulation ahead of a potential 2026–2027 tightening phase. A clean break below $3.44 while storage and weather stay comfortable would validate a more aggressive bearish view; a firm defence of that area combined with a turn toward colder late-winter forecasts and persistent 18–19 Bcf/d LNG feedgas would justify shifting from Hold to a more constructive stance. At current levels the data support a Hold rating on NG=F with a clear tactical bias to fade strength until the weather, storage trajectory or project pipeline deliver a genuine change in the tape.
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