Natural Gas Market Note | 12.10.2025
Market stabilizes as traders await new fundamental data points.
The rout that sent natural gas prices plunging over the past two trading sessions came to at least a temporary halt, with the futures market finishing Wednesday little changed. Prices were up marginally through Winter 2026-27 and down modestly beyond that. Benchmark futures for January 2026 delivery ended the day near the middle of the 24-cent trading range, suggesting the market may be finding equilibrium at least temporarily.
The recent selloff has been driven by weather models showing a broad warmup following the major cold snap expected this weekend. That idea appears fully baked into pricing at this point, with mainstream forecasts now in agreement that mild weather is on the way beginning around December 16 and 17. From here, the market will await further clarity surrounding temperature patterns beyond the two-week period. Early indications point to the possibility of a return to slightly cooler-than-normal conditions on average, but confidence in any outlook beyond the 14-day window is especially low.
Tomorrow’s storage report covering the week ended December 5 will be the market’s first view into how a significant cold snap will impact underground inventories against this winter’s backdrop of all-time record domestic production. The market is anticipating a draw of 173 Bcf, according to a Wall Street Journal survey of analysts. Responses ranged from a draw as light as 161 Bcf to as steep as 191 Bcf.
If the actual draw comes in near the consensus, it would do little to change inventories relative to year-ago levels, which declined by 167 Bcf during the corresponding week amid a cold snap. However, it would cut the surplus to the five-year average significantly, as that benchmark fell by only 89 Bcf. With the following two storage reports also expected to show outsized draws, inventories appear likely to fall back to a deficit to the five-year average before the calendar turns to 2026.
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