⚡Natural Gas MarketWatch — November 11, 2026: December Holds a Four-Week High as Cold Air and Record LNG Meet EIA's Winter Downgrade

Tony Zelinski

2 hours ago

5 min read

⚡Natural Gas MarketWatch — November 11, 2026: December Holds a Four-Week High as Cold Air and Record LNG Meet EIA's Winter Downgrade

The rally held. December natural gas closed Tuesday at $3.2960 — its highest settlement in four weeks — after a second straight strong session, as the first cold shot of the season, record LNG export demand, and a production slip kept the short squeeze alive. But the EIA's new winter outlook landed like a bucket of cold water on the bulls: the agency slashed its November–March Henry Hub forecast 16%, arguing mild weather, ample storage, and rising output will cap prices. The market now has to choose which story to believe.

Market Recap

The NYMEX December 2026 contract settled Tuesday at $3.2960/MMBtu, up 7.80¢ (+2.42%) on the day, after Monday's 22.00¢ (+7.34%) surge to $3.2180. The two-day gain of 29.8¢ (+9.9%) from Friday's $2.9980 close puts December at its highest level since mid-October and above $3.20 for the first time in weeks. Early Wednesday electronic trading held the gains, with December near $3.31. The move remains a positioning story as much as a weather story: CFTC data released Friday showed money managers holding a record 636,576 short-only positions across Henry Hub contracts, and every colder forecast revision forces another round of covering.

Key Bullish and Bearish Drivers

Bullish: forecasts have turned cooler for the central and eastern U.S. through November 20, the first sustained cold signal in weeks, with a cold front due to sweep the eastern half of the country midweek. LNG feedgas set a record of about 20.17 Bcf/d over the weekend, led by Venture Global's Plaquemines plant running above nameplate capacity, and eased only to about 19 Bcf/d by Tuesday on lower Sabine Pass deliveries. Lower 48 production has slipped to about 110 Bcf/d so far in November, down from 113.4 Bcf/d in October and the 115.0 Bcf/d August record.

Bearish: the EIA's November Short-Term Energy Outlook, released Tuesday, cut its winter Henry Hub forecast to $2.87/MMBtu for November–March — 16% below last month's outlook — citing mild weather, higher storage expectations, and production growth outpacing demand. NOAA's outlook still leans warm under a strong El Niño, and October was the warmest October on record, per European climate models. Storage sits above the five-year average. If the cold fails to verify, the squeeze unwinds fast.

Storage Fundamentals

The latest EIA report — released Thursday, November 5, covering the week ended October 30 — showed a 77 Bcf injection, slightly below the ~81 Bcf consensus but above the 61 Bcf five-year average for the week. Total working gas stands at 3,801 Bcf, 109 Bcf (−2.8%) below last year's 3,910 Bcf but 54 Bcf (+1.4%) above the five-year average of 3,747 Bcf, and within the five-year historical range. The South Central region led the build with +40 Bcf. Bank of America projects end-of-season storage near 3.886 Tcf. Note the calendar: the next report arrives Friday, November 13 at 10:30 AM ET — pushed a day by the Veterans Day holiday — covering the week ended November 6. Analyst estimates a 67 Bcf build; the five-year average for that week is a 40 Bcf injection.

Regional Basis Markets

The Northeast is still a market of two realities. Spot gas is cheap: Algonquin Citygate traded near $1.31 late last week, with Transco Zone 6 New York near $1.03 and Texas Eastern M-3 at $1.06 — deep discounts to a Henry Hub spot near $2.61 — as mild weather and ample Appalachian supply leave the region oversupplied. But January 2027 forwards at Algonquin still top $20/MMBtu, with January basis near $17.64 over Henry Hub. The risk is deliverability, not supply: last January, Winter Storm Fern drove Algonquin to $122.58/MMBtu, and Transco Zone 6 New York to $142.72, and ISO New England's December–February wholesale electricity transactions totaled about $6 billion, the highest winter total since the markets began in 2003. The first real cold snap is the test of that setup. Watch Algonquin basis, not just Henry Hub.

Production Trends

Output is easing from record highs but remains near all-time levels. Lower 48 dry gas production has averaged about 110 Bcf/d so far in November, down from 113.4 Bcf/d in October, with daily output dipping toward a five-month low near 108 Bcf/d. EIA still expects output to reach a record 116.1 Bcf/d in 2027, driven by Permian growth and new pipeline capacity, while LNG exports are forecast at 19.0 Bcf/d in 2027 — up 26% from 2025. The structural pull is real: export plants are absorbing roughly a fifth of U.S. production at record feedgas levels, even as domestic prices stay low. That is the tension in this market — record supply growth against record export demand, with weather as the tiebreaker.

Broader Energy Context

Crude moved the other way again. WTI settled Tuesday at $86.04/bbl (−0.9%) and Brent at $91.49 (−1.2%), both at their lowest closes since August 31, after Monday's sharp selloff on easing U.S.–Iran tensions. Early Wednesday, both bounced back — WTI near $86.70 (+0.8%), Brent near $92.53 (+1.1%) — as fresh attacks on shipping in the Strait of Hormuz (37 vessels attacked in October, the most since the war began) revived supply concerns. Heating oil (ULSD) settled Tuesday at $4.1309/gal (−2.0%) and traded near $4.17 early Wednesday; RBOB gasoline traded near $2.61/gal. API data showed U.S. crude inventories up 9 million barrels for the week ended November 6; the EIA petroleum report, delayed by Veterans Day, lands Thursday at noon, and the OPEC monthly report is due today. On the storm front, the National Hurricane Center reports no tropical cyclones in the Atlantic and no formation expected in the next seven days; a cold front, not a hurricane, is the Gulf's main weather feature this week.

What Energy Buyers Should Watch

The next EIA storage report, Friday, November 13 (delayed by Veterans Day) — NGI estimates a 67 Bcf build; watch South Central salt storage and the surplus vs. the five-year average.
Whether the midweek cold shot verifies — the rally only holds if the 11–15 day outlook stays cold; a warm revision unwinds the squeeze.
LNG feedgas holding near 20 Bcf/d — record export pull is the market's structural floor.
January Algonquin basis — the first real Northeast cold snap can move basis from ~$1 to $10+ in days.
EIA's petroleum report Thursday at noon (API showed +9M bbl crude) and the OPEC monthly report today — crude's war premium is unwinding fast.
The EIA's $2.87 winter Henry Hub forecast — the official view says this rally is borrowed time.

Premier Energy Management Perspective

This is a market caught between two true stories. The EIA is right that the national balance is comfortable — storage above the five-year average, production near records, no storm threat, and a warm-leaning winter outlook. But the marginal molecules tell a different story: LNG exports are setting records, production is slipping, and the most crowded short in the market's history is still unwinding. For buyers in New Jersey and Massachusetts, the lesson is unchanged: Henry Hub is not your price.

Basis is your price, and New England winter basis is priced for exactly the kind of cold snap the forecasts have now delivered. Locking winter positions while the national market is calm costs far less than chasing them after the first freeze.

Market Bottom Line

December gas held its four-week high at $3.2960 on cold forecasts, record LNG demand, and a record fund short squeeze — but the EIA just cut its winter price forecast 16% to $2.87, and storage remains comfortable. Treat this as a window, not a forecast: the fundamentals still favor buyers who act before winter arrives in earnest.