Here’s a quick snapshot of the latest developments in the natural gas market:
Lower 48 gas production reached an all-time high of ~109.5 Bcf/d over the weekend.
LNG feedgas + Mexico gas exports are near ~27 Bcf/d.
Net gas supplies (total supplies - structural demand increase) change y-o-y is flat. This means that at 109.5 Bcf/d, any additional increase in production will tip the market into surplus, while any decrease below this level would tip the market into a deficit.
Weather models have trended colder, with the back-end of the model showing a return of colder-than-normal weather by mid-December.
January Henry Hub contracts are trading near their fair value today ($4.921/MMBtu). The only way for prices to move higher is if the colder-than-normal weather forecast in December materializes.
According to Commodity Wx Group, December 2025 is expected to be colder than normal.
Source: Commodity Wx Group
In addition, CWG is pointing out another stratospheric warming event.
If such a scenario materializes, we expect January contracts to hit $6/MMBtu.