Natural Gas Prices - Dec 12

[dan_s]

In December and January the weather forecasts for the eastern half of the U.S. are the primary driver of where the front month NYMEX contract (the price you see in the news) trades each day. On a percentage basis, NYMEX contracts for HH natural gas are much more volatile than oil prices.

Note from HFI Research: "Mother Nature plays the dominant role during winter natural gas trading, and the volatility we are seeing in January contracts is an illustration of that." < On Friday, December 5 the JAN26 contract spiked up to $5.50/MMBtu.

"Jan Henry Hub contracts are down ~20% for the week, and for those tempted to buy the dip, I come with some words of caution. Unless you have a very strong view that the weather models are about to turn bullish, I suggest you exercise patience. Natural gas traders often push prices to extremes, and this is no exception."

My 2026 forecasts are all based on HH Ngas averaging $4.00/MMBtu for the year. If gas in storage at the end of March is below the 5-year average my WAG is that the average price for the year will be much higher.

> CelsiusEnergy is forecasting Ngas storage draws of 159 Bcf for the week ending December 12 (63 Bcf higher than the 5-year average) and 146 Bcf for the week ending December 19 (36 Bcf higher than the 5-year average). < If these are the actual draws, U.S. storage will be back to the 5-year average a week from today.
> Forecasting weather during a La Nina winter is more challenging because of the big swings in the northern jet stream.
> The long-range weather forecasts have a bias to warmer than normal temperatures. For example, two weeks ago there was nothing in the forecast about the record cold we are going to see around the Great Lakes Region this weekend.
> LNG exports will set new records week after week during Q1 2026 as the Corpus Expansion, Plaquemines LNG and Golden Pass export facilities ramp up; adding another 6 Bcfpd of export capacity. < See slide 6 of my slide deck that I spoke from at our luncheon on December 9th. You can view them from the EPG home page.
> In 2026, we will be hearing a lot more about gas-fired power plants being built by AI Data Centers.