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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (67403)	10/31/2025 2:49:07 AM
From: Johnny Canuck	Respond to of 67754

Natural gas market outlook Chain of Thought To evaluate the natural gas market outlook over the next 9-12 months (through mid-to-late 2026), I first anchor on current conditions as of October 30, 2025. The Henry Hub spot price stands at approximately $3.93/MMBtu, up from $3.45/MMBtu in late October and a September average just under $3.00/MMBtu, reflecting seasonal winter demand anticipation and a 13% monthly gain. Year-to-date, prices have risen about 45% from 2024 lows, but remain well below 2022 peaks above $6.50/MMBtu due to robust U.S. supply and high inventories. Supply fundamentals are supportive of stability with upside potential. U.S. dry natural gas production is projected to reach record levels at 107 Bcf/d in both 2025 and 2026, up from 103.2 Bcf/d in 2024, driven by efficient shale output in the Permian and Appalachia basins; this is a slight upward revision from prior EIA estimates, adding 1.3 Bcf/d more in 2026 than forecasted last month. Globally, LNG supply growth accelerates to its fastest pace since 2019 in 2026, led by U.S. (e.g., Plaquemines and Corpus Christi expansions adding 5 Bcf/d capacity through 2026), Canada, and Qatar, easing tightness. U.S. LNG exports are forecast to surge 24% to 14.7 Bcf/d in 2025 and 16.3 Bcf/d in 2026 from 11.9 Bcf/d in 2024, capturing European and Asian demand. However, high U.S. inventories—ending 2025 at 3,380 Bcf (3% above prior forecasts)—and non-OPEC+ like production growth temper immediate price spikes. Demand growth is steady but weather-sensitive. U.S. consumption hits a record 91.4 Bcf/d in 2025 (up 1% YoY), fueled by power sector needs (40% of electricity generation) and exports, though coal's minor rebound in early 2025 (15% higher H1) slightly offsets gas use. Globally, demand expanded robustly in 2024 but slowed in H1 2025 due to high prices and economic uncertainty, with declines in China and India; however, IEA expects acceleration in 2026 as cheaper LNG supports Asian recovery and Europe's imports hit all-time highs in 2025 amid reduced Russian piped gas. Key drivers include colder winters boosting heating (e.g., +0.5-1 Bcf/d per degree below normal) and data center/AI power demand, though efficiency gains and renewables cap upside. Market balance points to a well-supplied environment with modest draws. EIA anticipates Henry Hub averages of $3.40/MMBtu for full-year 2025 (down 2.8% from prior forecast) and $3.90/MMBtu in 2026 (down 8%), reflecting higher production and storage offsetting demand. Analyst views vary: Goldman Sachs holds Nov-Dec 2025 at $4.00/MMBtu and eyes $4.60/MMBtu in 2026 on export strength; Morgan Stanley sees $5.00/MMBtu in 2026 from constrained supply. Broader futures (Dec 2025-Nov 2026 strip) trade at $3.84/MMBtu, implying range-bound trading $3.50-$4.50/MMBtu through winter, with Q1 2026 peaks near $4.10/MMBtu before softening. Geopolitical and weather risks add volatility. Europe's reliance on U.S. LNG (up amid Ukraine war fallout) and Middle East tensions (Israel-Iran) could tighten spot markets if disruptions hit 1-2 Bcf/d equivalents, potentially +$0.50-1.00/MMBtu spikes. Conversely, mild winters or delayed LNG projects (e.g., regulatory hurdles) pose downside. Overall, the outlook is constructively balanced: export-led demand growth supports gradual price firming into 2026, but abundant U.S. supply prevents sharp rallies, favoring steady mid-$3s to low-$4s averages absent extremes. Natural Gas Market Outlook Summary (Next 9-12 Months) Price Trajectory: Range-bound $3.50-$4.50/MMBtu (Henry Hub), averaging $3.80/MMBtu through Q1 2026 before stabilizing near $4.00/MMBtu by mid-2026, with winter peaks possible to $4.10/MMBtu on cold snaps. Key Bullish Factors: Surging U.S. LNG exports (to 16 Bcf/d by 2026); European/Asian demand rebound; weather-driven heating needs; data center electrification. Key Bearish Factors: Record U.S. production (107 Bcf/d); elevated inventories (3,380 Bcf end-2025); economic slowdowns curbing industrial use; renewable competition in power sector. Overall: Mildly bullish tilt with low volatility risk; ample supply ensures affordability, but export momentum and winters could drive 10-15% gains. Watch U.S. weather patterns and LNG loading data for near-term swings.