Natural Gas News: Bulls Eye $5.992—But Will Mid-December Warmth Spoil the Rally?

Natural Gas Pops 9% as Cold Weather, LNG Demand Tighten the Tape

Natural gas futures surged last week, with the January ’26 contract (NGF26) jumping 9.05% to settle at $5.289/MMBtu—the highest weekly close for this contract since early April. The move was driven by colder-than-expected weather, tightening storage fundamentals, and record-setting LNG demand.

After trading in a wide range between $4.758 and $5.496, the contract closed firmly above its 52-week moving average, flipping sentiment bullish and shifting the market into a tighter regime.

Is Winter Demand Finally Living Up to the Hype?

It sure is. After a slow start to the heating season, colder-than-normal temps hit the Midwest and Northeast, sparking a sharp uptick in consumption. The Northeast posted 744 heating degree days—well above seasonal norms—driving a 25% week-over-week jump in demand. Residential and commercial use led the way with 2.7 Bcf/d of added burn, while power gen rose 8%.

The price response was immediate. Algonquin Citygate exploded to $25/MMBtu—up nearly $17—as pipeline constraints left New England scrambling. Utilities pivoted to oil burn, imports, and regasified LNG. It’s the same structural issue that shows up every winter—limited pipe, high demand, not enough flexibility.

Is Production Keeping Pace?

Not really. Output held steady near 109 Bcf/d, with no freeze-offs or major disruptions. But producers didn’t chase the rally. After getting burned by the 2024 price collapse, they’re sticking with capital discipline. So while supply hasn’t dropped, it also isn’t responding to price. In a tightening market, that’s bullish.

How Much of the Rally Is LNG-Driven?

A big chunk. Feedgas deliveries topped 18.5 Bcf/d last week, driven by new capacity at Plaquemines and Corpus Christi Stage 3. U.S. terminals are running near full tilt, and 37 LNG cargoes (138 Bcf) left U.S. ports during the week. That’s nearly 18% of domestic supply leaving the grid—enough to keep a floor under prices, even in a warm-weather lull.

What’s the Forecast Saying Now?

Weather was the spark, and the data backs it up. The Northeast logged 744 HDDs—55 above the 30-year average—confirming the first real demand spike of the season. That flipped sentiment fast.

Algonquin cash jumped from $8.08 to $25/MMBtu in one week—a sign that the market had been leaning too mild. Forecasts show cold holding through December 13 across the Midwest and East. But beyond that, models are mixed. Some show a late-December warm-up across the South and East, which could trigger profit-taking after the recent rally.

If cold holds, storage draws will steepen—and the market could start eying $5.992. If not, look for sellers to test support near $5.20. Either way, weather is the driver near term.

What’s the Trade Setup Now?

Technicals are clean. The break above the 52-week moving average at $4.738 was key. Buyers stepped in through $5.00, and the close at $5.289 leaves the market well above retracement support at $5.198–$4.953. The next big level is $5.992—just 13% away.

Bottom line: NGF26 has built a higher range. With structural LNG demand, flat production, and active winter heating needs, dips into support should attract buyers. If weather stays supportive, bulls remain in control. If it warms up, we could see a pause—but not necessarily a collapse.

More Information in our Economic Calendar.