Natural gas futures on NYMEX are plunging by around 5.5% in response to record-high production and warmer weather forecasts in the United States. NATGAS has fallen roughly 28% since the beginning of the month, with this dual pressure accelerating the return of prices to early-autumn levels.
According to the latest data, average natural gas production across the Lower 48 states set a new record in December at 109.9 billion cubic feet per day, surpassing November’s level of 109.6 bcf/d (source: LSEG). Price declines are also being reinforced by mild weather forecasts. Meteorologists expect US temperatures to remain near or slightly above seasonal averages through January 6, reducing household heating demand.
According to S&P Global Energy, global LNG supply is expected to increase by about 10% in 2026, marking the strongest year-on-year growth since before the COVID-19 pandemic. At the same time, as a record amount of new capacity comes online, the pace of final investment decisions for the next wave of LNG projects is set to slow. It is also worth noting that net long positions in NATGAS have increased by around 50,000 since the start of the month, although they remain negative (-106.5k), suggesting a growing number of investors are positioning for a slowdown in the recent price declines.
Source: xStation5
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