Natural Gas Market Snapshot
- After briefly jumping above $5 to nearly $5.40, natural gas prices have fallen back below $5 to around $4.57 per MMBtu, primarily driven by a milder outlook for the last two weeks of the year.
- This price level is highly weather-sensitive, so a shift back to colder forecasts could send prices higher again. At the same time, continued mild conditions could create a window to lock in energy blocks for next winter or even the coming summer.
EIA Natural Gas Storage Report
The weekly EIA Natural Gas Storage Outlook report tracks the volume of natural gas in underground U.S. storage, revealing weekly fluctuations and comparison against 5-year averages.
Natural Gas Supply and storage
- U.S. natural gas production has climbed to record territory near 109 Bcf per day, helping to keep storage inventories healthy even as demand and exports increase.
- Exports of gas, including LNG, now exceed 19 Bcf per day, and while last week’s storage withdrawal was modest at about 12 Bcf, colder periods ahead could trigger withdrawals exceeding 100 Bcf.
WINTER NATURAL GAS PRICING
LNG EXPORTS
Growing Export Demand
- U.S. LNG exports are running close to capacity at roughly 19.2 Bcf per day, reflecting strong global demand for U.S. gas.
- Export capacity is expected to expand significantly over the next several years, with projections that U.S. LNG export capacity could reach roughly 28–33 Bcf per day around 2030, tightening the market over time.
Action Steps
- For near term: With January approaching and much of the early-winter volatility already priced in, it may be prudent to remain on the index in the short run and watch for a warm spell or softer weather pattern that could push prices lower.
- For late winter: If forecasts for a colder-than-normal winter fail to materialize by February, investors who bought in on the cold narrative may start to unwind positions, potentially creating an attractive opportunity to hedge a reasonably priced block of energy.
- For large users (1M+ kWh/year): Focus on stripping unnecessary premiums out of your rate (such as capacity adders) and consider a managed index strategy that lets you layer in blocks during market dips and stay on index when prices are favorable, rather than locking into a fully fixed all‑in rate.
Cold fronts will move across the northern U.S. this week, bringing highs in the teens to 30s and lows from below zero to the 20s — driving strong national energy demand. The West and far South will stay milder, with highs in the 40s to 60s, and some spots reaching the 70s. The East can expect a mix of mild and chilly days, with temperatures ranging from the 20s to 60s. Overall demand will ease to moderate Tuesday through Thursday, and rise again to high levels Friday through Sunday.
NYMEX Natural Gas Calendar Strips
• The NYMEX 12-Month Strip averages the next 12 months of Henry Hub futures into one price. It’s a powerful indicator of market sentiment, allowing traders (and end-users) to lock in year-long coverage at a blended rate.
Watching shifts in this strip helps gauge the broader direction of gas markets, beyond just the prompt month.
NYMEX PRICE TREND ANALYSIS
(PJM) AD HUB DA & FWD TREND ANALYSIS
BAKER HUGHES OIL & GAS WELL COUNTS
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