My 10 August call on this contract failed on its own terms. January 2027 natural gas had settled at $3.741 by 18 September, under the $3.75 line I set. The storage half of that call has partly come true, since the cushion the El Niño bears relied on has mostly gone. In all 12 winters since 1994 that began with storage this close to normal, though, January was lower by 30 November, so I’ve turned on my own call and expect it to work lower, toward $3.25. Below, I score the August call and test the storage argument on 30 winters of EIA records.
Natural Gas Eyes $3.25 Even as the Storage Cushion Shrinks
By:
Key Points:
- The storage cushion has shrunk: EIA's end-October forecast fell from a record 3,985 Bcf in August to 3,850 in October.
- January fell into expiry in 20 of 30 winters: I followed it from mid-October and sorted the winters by storage.
- One storage condition has broken the pattern since 1994: EIA's end-October print will show how close 2026 comes.