Natural Gas Radar

2025-10-02 23:50

Table of Contents

Brian's Thoughts

Published: 10/02/2025 Focus: Natural Gas
So we laid out 3.449 as the gap fill on Monday as a possibility, Tuesday after the break above 3.247 identified a high likelihood of the 3.449 gap fill, and Wednesday we reached the target - wow that was pretty quick! Now I am looking at two levels: 3.599 as the next target and 3.247 as the downside target if 3.50 is not held…after reaching the gap fill - the stall out could be a sign of exhaustion after the short covering rally (at least that’s what folks are saying - we won’t know for sure until the COT report comes out). Fundamentally - 3.247 and higher is validated by the current supply/demand and while I am still sitting at 3.8 TCF storage there are some analysts that I respect that are calling for 4.0 TCF which would give credence to another move down below $3 again. For now - I think we are in a large range of 3.247 to 3.5999

Today's Update

Updated: 2025-10-02 23:47:22 Length: 480 chars
Natural gas prices have recently exhibited volatility, hitting a gap fill at 3.449 before stalling, indicating possible market exhaustion. Current fundamentals suggest a trading range between 3.247 and 3.599, driven by supply-demand dynamics. Although inventories rose less than expected, forecasts of warmer weather have pressured prices downward. Analysts are divided, with some predicting storage could reach 4.0 TCF, potentially dragging prices below $3 again. Watch for th...

Executive Summary

Total supply decreased by 0.1 BCFD | Total demand increased by 2.8 BCFD | Market is oversupplied by 10.4 BCFD

Technical Analysis

Overall Technical Score (-5 to +5): 0 (Neutral)
Current Price: $3.44
Signal: Neutral

Moving Averages (9/20)

BULLISH

MA(9): $3.08

MA(20): $3.05

Current Price is 3.44, 9 day MA 3.08, 20 day MA 3.05

MACD (12, 26, 9)

BULLISH

MACD: 0.0808

Signal: 0.0192

Days since crossover: 4

MACD crossed the line 4 days ago and is in a bullish setup

RSI (14)

NEUTRAL

Value: 67.13

Category: NEUTRAL

RSI is 67.13 (note 70% is overbought and 30% is oversold)

Volume (vs 20d Avg)

LOWER

Current: 3,202

Avg (20d): 146,190

Ratio: 0.02

Volume is lower versus 20 day average

Stochastic (14, 3)

OVERBOUGHT

%K: 92.5

%D: 94.0

Stochastic %K: 92.5, %D: 94.0. Signal: overbought

ADX (14)

NO TREND

ADX: 18.57

+DI: 33.74

-DI: 15.73

ADX: 18.57 (+DI: 33.74, -DI: 15.73). Trend: no trend

Williams %R (14)

OVERBOUGHT

Value: -7.5

Williams %R: -7.5 (overbought)

Bollinger Bands (20, 2)

BREAKOUT UPPER

Upper: 3.43

Middle: 3.05

Lower: 2.67

Price vs BBands (20, 2): breakout upper. Upper: 3.43, Middle: 3.05, Lower: 2.67

Fundamental Analysis

Category Current (BCFD) Last Week Last Year 3 Yr Avg
Dry Production 106.7 107.0 101.2 100.37
LNG Imports 0.0 0.0 0.1 0.1
Canadian Imports 5.0 4.8 5.9 5.53
Total Supply 111.7 111.8 107.2 105.97
Industrial Demand 22.1 22.1 21.8 21.73
Electric Power Demand 40.0 38.2 38.6 37.27
Residential & Commercial 8.8 8.8 8.8 8.83
LNG Exports 16.3 16.2 12.9 12.5
Mexico Exports 7.2 6.5 6.7 6.13
Pipeline Fuel 6.8 6.8 6.6 6.67
Total Demand 101.3 98.5 95.4 93.1
Supply/Demand Balance 10.4 13.3 11.8 12.87

Weather Analysis

Weather Impact Summary

Overall: HEATING dominated (HDD: 7.3, CDD: 5.2)
Residential/Commercial: MODERATE heating demand expected
Power Generation: MODERATE cooling demand expected

Regional Weather Patterns

Northeast

Heating dominated (HDD: 13.5)

Midwest

Heating dominated (HDD: 9.5)

South

Cooling dominated (CDD: 10.0)

West

Cooling dominated (CDD: 16.0)

Degree Days by City

Chicago, IL

Heating Degree Days (HDD): 9.5
Cooling Degree Days (CDD): 0.0
Total HDD: 23.5
Total CDD: 47.5

New York, NY

Heating Degree Days (HDD): 14.5
Cooling Degree Days (CDD): 0.0
Total HDD: 26.0
Total CDD: 42.0

Houston, TX

Heating Degree Days (HDD): 0
Cooling Degree Days (CDD): 10.0
Total HDD: 0
Total CDD: 140.0

Los Angeles, CA

Heating Degree Days (HDD): 0
Cooling Degree Days (CDD): 16.0
Total HDD: 0
Total CDD: 117.0

Philadelphia, PA

Heating Degree Days (HDD): 12.5
Cooling Degree Days (CDD): 0.0
Total HDD: 22.0
Total CDD: 30.0

Economic Analysis

Economic Sentiment Summary

POSITIVE - Economic indicators generally supportive
Dollar Impact: Strong USD may pressure commodity prices
Industrial Demand: Strong industrial demand signals
Interest Rate Impact: Stable/lower rates may support demand
Risk Sentiment: Low market volatility/risk appetite

Economic Indicators

USD_INDEX

97.89
Daily: 0.18 (0.19%)
Weekly: -0.26 (-0.26%)

US_10Y

4.09
Daily: -0.02 (-0.44%)
Weekly: -0.1 (-2.36%)

SP500

6715.35
Daily: 4.15 (0.06%)
Weekly: 71.65 (1.08%)

VIX

16.63
Daily: 0.34 (2.09%)
Weekly: 1.34 (8.76%)

GOLD

3864.3
Daily: -3.2 (-0.08%)
Weekly: 89.0 (2.36%)

COPPER

4.96
Daily: 0.13 (2.74%)
Weekly: 0.25 (5.25%)

CFTC Commitment of Traders Analysis

Natural Gas Positioning (NAT GAS NYME - NEW YORK MERCANTILE EXCHANGE)

Report Date: 2025-09-23
Sentiment: Bearish and Strengthening
Positioning: Normal Range

Open Interest

1,626,777
Change: -11,903

Managed Money

-63,176
Change: -40,085
-3.9% of OI

Producer/Merchant

-4,944
Change: +8,712
-0.3% of OI

Swap Dealers

124,686
Change: +6,611
7.7% of OI

Other Reportables

-64,908
Change: +22,945
-4.0% of OI

Analysis Rationale (Managed Money):

  • Managed Money sentiment: bearish and strengthening

Crude Oil Positioning (WTI-PHYSICAL - NEW YORK MERCANTILE EXCHANGE)

Report Date: 2025-09-23
Sentiment: Bullish but Weakening
Positioning: Normal Range

Open Interest

1,936,690
Change: -25,930

Managed Money

26,483
Change: -10,316
1.4% of OI

Producer/Merchant

283,712
Change: -9,029
14.6% of OI

Swap Dealers

-402,312
Change: +5,178
-20.8% of OI

Analysis Rationale (Managed Money):

  • Managed Money sentiment: bullish but weakening

LNG Market Analysis

LNG Market Summary

TTF prices remained stable to 11.122 EUR/MWh (+0.000). JKM prices decreased to 11.045 USD/MMBtu (-0.005). JKM is trading at a discount of 0.077 to TTF, suggesting weaker Asian demand.

TTF Prices

11.122

+0.000

Front month: OCT 25

As of 2025-10-02

JKM Prices

11.045

-0.005

Front month: NOV 25

As of 2025-10-02

JKM-TTF Spread

-0.077

-0.69%

JKM is trading at a discount to TTF, suggesting weaker Asian demand.

As of 2025-10-02

Forward Curves Visualization
TTF (EUR/MWh)
JKM (USD/MMBtu)
11.2
11.0
10.8
10.6
10.4
11.12
11.04
OCT 25
10.79
10.91
NOV 25
10.96
11.15
DEC 25
11.07
11.13
JAN 26
11.10
10.88
FEB 26
10.96
10.52
MAR 26
10.65
10.47
APR 26
10.53
10.57
MAY 26
10.55
10.74
JUN 26
10.59
10.88
JUL 26
10.63
10.94
AUG 26
10.72
11.06
SEP 26
TTF Forward Curve (Next 12 Months)
Month Price (EUR/MWh)
OCT 25 11.122
NOV 25 10.787
DEC 25 10.964
JAN 26 11.068
FEB 26 11.097
MAR 26 10.964
APR 26 10.650
MAY 26 10.528
JUN 26 10.553
JUL 26 10.587
AUG 26 10.632
SEP 26 10.724
JKM Forward Curve (Next 12 Months)
Month Price (USD/MMBtu)
NOV 25 11.045
DEC 25 10.910
JAN 26 11.150
FEB 26 11.135
MAR 26 10.875
APR 26 10.520
MAY 26 10.470
JUN 26 10.575
JUL 26 10.740
AUG 26 10.875
SEP 26 10.935
OCT 26 11.060

News & Sentiment Analysis

Market Sentiment Overview

BEARISH
Average Polarity: -0.375
Confidence: 1.0
Articles Analyzed: 85
Last Updated: 2025-10-02 23:50:15

Commodity Sentiment

NATURAL_GAS

0.1

CRUDE_OIL

-0.85

Top News Topics

Supply (13 articles)

Demand (2 articles)

Infrastructure (1 articles)

Geopolitical (1 articles)

Weather (4 articles)

Fibonacci Levels Analysis

Current Price: $3.44
Closest Support: $3.41 0.87% below current price
Closest Resistance: $3.63 5.52% above current price

Fibonacci Retracement Levels

0.0 $2.62
0.236 $2.86
0.382 $3.01
0.5 $3.13
0.618 $3.24
0.786 $3.41 Support
1.0 $3.63 Resistance

Fibonacci Extension Levels

1.272 $3.9
1.618 $4.25
2.0 $4.64
2.618 $5.26

ML Price Prediction

Current Price: $3.44
Forecast Generated: 2025-10-02 23:50:15
Next Trading Day: UP 0.78%
Date Prediction Lower Bound Upper Bound
2025-10-03 $3.47 $3.26 $3.68
2025-10-04 $3.43 $3.22 $3.64
2025-10-05 $3.44 $3.23 $3.64
2025-10-06 $3.42 $3.21 $3.62
2025-10-07 $3.42 $3.21 $3.63

ML Insights

  • Forecast generated using ARIMA(5, 1, 0).
  • The model predicts a price increase of ~0.78% for the next trading day (2025-10-03), reaching $3.47.
  • The 5-day forecast suggests a generally downward trend, moving about -1.4% between 2025-10-03 and 2025-10-07.
  • The average confidence interval width is ~12.1% of the predicted price, indicating model uncertainty.
  • SIGNAL: Weak bullish signal, high uncertainty.

AI Analysis

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For Energy Traders:

Current market data suggests a neutral technical interpretation with a Fibonacci support level at 3.41 and resistance at 3.63. The ML price forecast indicates a slight upward movement of 0.78%, with a trading range expected between 3.26 and 3.68. Traders should be aware of potential volatility due to mixed weather impacts—heating demand is expected to dominate in the Northeast and Midwest, while cooling demand is stronger in the South and West. This divergence could create short-term trading opportunities.

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For Producers (Oil & Gas Companies):

The fundamental balance shows a decrease to 10.40 BCFD with a ratio of 1.103, indicating a tightening market. However, negative sentiment surrounding crude oil prices, driven by concerns about oversupply and weak demand, could affect production planning. Producers should consider hedging strategies to mitigate risks from fluctuating prices, especially given the moderate heating demand forecast that may influence natural gas consumption.

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For Consumers (Industrial/Utilities):

With moderate heating demand expected, consumers should prepare for potential cost fluctuations in natural gas and heating oil. The overall neutral market sentiment suggests that while prices may remain stable, there are risks associated with supply reliability. Procurement strategies may need adjustment based on the fundamental balance and the anticipated ML price forecast indicating slight upward pressure. Monitoring regional weather patterns will be crucial for effective energy management.

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For Commodity Professionals (Analysts, Consultants):

The market is currently characterized by neutral sentiment, with a fundamental balance indicating a slight tightening. The negative sentiment surrounding crude oil, alongside positive sentiment for natural gas, suggests mixed drivers in the energy sector. Key factors influencing this market include weather impacts on demand and ongoing concerns regarding supply gluts. Analysts should focus on monitoring these trends closely, as shifts in sentiment or weather forecasts could lead to significant market adjustments.

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.

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