Natural Gas Price Forecast - NG=F Jumps Above $4.60 as Storage Flips to Deficit and LNG Exports Hit Records

Natural Gas Price NG=F – Winter Rally Built on Storage Deficit, Record LNG Flows and Weather Risk

Front-Month NG=F Regains the $4 Handle After Storage Shock and Volatile Rollover

Front-month U.S. Natural Gas futures have flipped from a warm-weather selloff into a winter rebound. After briefly slicing below $4.00 and testing support near $3.85 during the latest contract rollover, NG=F has rebounded toward the mid-$4s, with intraday moves pushing January around $4.65–$4.70 per MMBtu and spot Henry Hub hovering in the low-to-mid $4s. That recovery follows roughly a 10% bounce in late December, capping a year where gas is up more than 20% and confirming that the sub-$4 dip was a corrective air pocket, not a structural breakdown. The key message from price action: the market still trades winter risk, not surplus complacency.

Storage Deficit Replaces Surplus as 166 Bcf Draw Resets the Five-Year Benchmark

The single most important fundamental shift for Natural Gas this month is in storage. The latest weekly withdrawal of 166 Bcf from U.S. working gas inventories for the week ending December 19 erased what remained of the surplus versus the five-year average and flipped stocks into deficit. That 166 Bcf pull compares with just 98 Bcf during the same week last year and a five-year average withdrawal of around 110 Bcf, underscoring how quickly balances have tightened once real winter demand arrived. Traders had been positioned for another heavy draw, with consensus near 168 Bcf, but the key is not the small miss versus estimates; it is the structural turn from surplus to deficit in a single three-week sequence of oversized pulls. With inventories now below the five-year trajectory, every additional cold week compounds the risk of a tighter end-of-winter cushion, particularly if draws remain above seasonal norms.

Record Supply vs Record LNG Feedgas – Why NG=F Still Trades a Tight Balance, Not a Glut

On the surface, U.S. supply looks overwhelming. Lower-48 gas output has reached a record 110.1 Bcf per day in December, surpassing the previous record of 109.6 Bcf per day set in November. That kind of production base would normally crush winter risk premia. It has not, because structural demand has risen in parallel. Average gas flows to the eight large U.S. LNG export plants have climbed to roughly 18.5 Bcf per day so far this month, already above the prior monthly record of 18.2 Bcf per day. On a daily basis, LNG feedgas has printed near 18.8 Bcf per day, with exports driven by facilities such as Sabine Pass drawing about 5.1 Bcf per day versus an average of 4.9 Bcf over the prior week. Domestic demand, including exports, is running around 138–139 Bcf per day this week and is projected only modestly lower, near 135–136 Bcf per day next week. That leaves the system finely balanced: record production, but also record export flows and firmly seasonal heating demand, which explains why the market responds aggressively whenever weather or storage data tilt even slightly bullish.

Weather and Heating Demand – HDDs Edge Above Normal as Households Face Higher Bills

Heating degree days have quietly crossed above seasonal norms, reinforcing the fundamental support under Natural Gas. Forecasts show nationwide HDDs rising from about 398 to 412, versus a near-normal benchmark of roughly 394, indicating colder-than-average conditions into early January. The impact is visible in consumer bills. Households using natural gas for heating—around 46% of U.S. homes, with concentrations such as Utah where nearly 80% of residences rely on gas—are facing winter cost increases of roughly 3% to 8.4%, with total seasonal gas bills projected in the $671 to $704 range. Electricity-heated homes are seeing even larger hikes of about 5% to 12%, to roughly $1,144 to $1,223 for the winter period. These numbers matter for NG=F because they reflect both the underlying commodity price and the pass-through effect of higher fuel and infrastructure costs. For the power sector, gas remains the main marginal fuel, so colder weather and higher power demand tighten gas balances both via direct residential heating and via gas-fired generation.

Technical Structure for NG=F – Key Levels at $3.63, $3.85, $4.15 and $4.50

Technically, Natural Gas has transitioned from a violent early-winter spike into a structured consolidation with a bullish tilt. The recent gap lower through $4.00 during the rollover exposed soft hands but found buyers almost immediately around $3.85, a level that has acted as near-term support. Below that, the 200-day EMA clusters around $3.63, aligning with a zone that has been defended multiple times this year; that area is now the critical medium-term floor. On the upside, the 50-day EMA near $4.15 is the first resistance already being tested by the rebound, with subsequent resistance around $4.50, a price band where rallies have previously paused. The fact that NG=F has rebounded from $3.85, reclaimed $4.00 and is now challenging the mid-$4s while storage flips into deficit suggests the path of least resistance near term remains higher, as long as $3.63–$3.85 holds on any renewed volatility. From a cyclical standpoint, the winter contract window (January–February) historically favors long bias; shorts tend to have better risk-reward once the market transitions into March and April shoulder-season flows.

Global Curves and European Storage – U.S. NG=F Still Trades at Discount to TTF and Asian Benchmarks

Global curves reinforce the medium-term support under U.S. Natural Gas pricing. European Title Transfer Facility contracts and Asian LNG benchmarks are trading near the $9–$10 per MMBtu range through much of the forward curve, well above Henry Hub levels, maintaining a wide trans-Atlantic and trans-Pacific spread. EU gas storage stands around 63.7% full—about 728 TWh—roughly 132.6 TWh below last year and 116 TWh under the five-year average. That deficit does not scream crisis, but it removes the comfortable buffer that allowed European prices to collapse in prior winters. As long as European and Asian hub prices trade at a premium to Henry Hub, U.S. LNG export utilization will remain high, keeping feedgas near the high-teens Bcf per day and anchoring a structural bid under NG=F. The global curve effectively caps the downside for U.S. prices and ties Henry Hub more directly to international winter dynamics than in prior cycles.

Retail Bills, AI Power Demand and Fuel Switching – How Structural Demand Supports Natural Gas

Consumer and industrial demand patterns tell a similar story. Retail gas and power bills are rising even before any extreme cold event, driven by three forces: higher underlying Natural Gas prices compared with prior winters, incremental power demand from data centers and other large-scale loads, and region-specific cost pressures such as wildfire-related infrastructure spending. Gas remains the dominant marginal fuel for U.S. power plants, so incremental electricity demand flows directly into gas burn unless coal or renewables can absorb the shock. The narrative that artificial-intelligence data centers would instantly transform the gas market was overhyped in the short run, but longer-term, those loads are real, and they anchor a higher floor under baseload power demand. At the same time, propane and heating oil users are seeing modest price declines—up to about 4% lower—thanks to high propane inventories and softer crude prices, but their total winter bills remain highest, around $1,291 for propane and $1,453 for heating oil, because they sit in the coldest regions. That reduces the incentive for wholesale switching away from gas and reinforces the role of Natural Gas as the least-bad option for many regions from a cost standpoint.

Short-Term Trading Framework for NG=F – Volatility Around Storage and Weather Catalysts

Near term, NG=F remains a trader’s market with sharp reactions to each storage print and model update. The three-week sequence of oversized withdrawals culminating in the 166 Bcf draw, plus the shift of inventories into deficit, triggered a sharp upside reaction that carried January futures toward $4.65–$4.70. The next storage reports are unlikely to match that magnitude if temperatures moderate, which means the market can whipsaw on any hint of a smaller-than-expected withdrawal. On the demand side, projections show total U.S. gas demand, including exports, easing marginally from about 138.4 Bcf per day to 135.8 Bcf per day, but that still sits at elevated winter levels. Any surprise cold snap or persistent blocking pattern that drives HDDs significantly above the 412 level into mid-January would quickly re-ignite fears of deeper inventory erosion. Against this backdrop, rallies toward the upper end of the recent range will be faded by weather skeptics, while dips back toward $4.00 will attract buyers anchored on the new storage deficit and strong export flows.

Natural Gas Price Outlook and Stance on NG=F – Tactical Buy with $4.80–$5.20 Upside, Watch $3.60–$3.85 as Line in the Sand

Pulled together, the data point to a structurally tighter but not yet explosive Natural Gas market. Storage has flipped from surplus to deficit versus the five-year average on the back of a 166 Bcf weekly withdrawal. Production is at a record 110.1 Bcf per day, but LNG feedgas near 18.5–18.8 Bcf per day and winter demand around 136–139 Bcf per day are absorbing that supply. HDDs have moved above normal, retail bills are rising, and global benchmarks in Europe and Asia continue to trade several dollars above Henry Hub, keeping export economics firmly positive. Technically, NG=F has defended key support zones at $3.85 and $3.63 while recovering the $4 handle and probing resistance between $4.15 and $4.50. On that basis, the stance is tactically bullish for the core winter window. For active positioning, NG=F is a Buy with a short-term price target zone in the $4.80–$5.20 range into January–February, assuming HDDs stay at or above current projections and storage draws remain at or slightly above seasonal norms. The downside risk band sits between $3.60 and $3.85; a sustained break below $3.60 would signal that production strength, mild weather, or weaker export flows have decisively overwhelmed winter demand, in which case the view shifts back to neutral. Beyond winter, as the curve rolls into March and April, the trade becomes less about tight balances and more about shoulder-season surplus; at that point, the stance fades toward Hold rather than Buy. For now, with inventories newly in deficit, LNG flows at records and NG=F still below the extremes seen earlier in 2025, the evidence supports a bullish, tactical Buy rather than a bearish or neutral call.

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