⚡Natural Gas MarketWatch — November 2, 2026: Mild November Start Keeps December Below $3.00

Tony Zelinski

29 minutes ago

4 min read

⚡Natural Gas MarketWatch — November 2, 2026: Mild November Start Keeps December Below $3.00

November is opening the way October ended: mild, well supplied, and priced for a heating season that has not yet arrived. The December NYMEX contract, now the front month, closed last week below $3.00/MMBtu as above-normal temperature forecasts, recovering production, and a larger-than-expected storage build outweighed strong LNG exports. For commercial and industrial buyers, the near-term setup remains favorable — but the winter risk that matters most in the Northeast has not gone away.

Market Recap

The December 2026 NYMEX contract settled Friday, October 30, at $2.898/MMBtu, down 5.4 cents on the session. That extended its weekly decline to 15 cents, about 4.9%, and its monthly loss to 47 cents. Thursday's settlement was $2.952/MMBtu, down 8.0 cents after the storage report. Early Monday morning, December futures were trading near $2.91/MMBtu, up about 0.3%, holding near a one-week low. The balance-of-winter 2026-27 strip slipped to about $2.93/MMBtu and Summer 2027 to about $2.71/MMBtu, both at new five-year lows. The $2.80 level is the near-term floor to watch; a close above $3.00 would be the first sign of a trend change.

Key Bullish and Bearish Drivers

Bearish: NOAA forecasts favor above-normal temperatures across much of the country into the first half of November, keeping heating demand subdued at the start of the withdrawal season. Production has recovered, and storage is now slightly above the five-year average.

Bullish: LNG exports remain a powerful floor under prices. October feedgas to U.S. export terminals averaged 18.5 Bcf/d, up from 17.9 Bcf/d in September, and daily feedgas spiked to 21.2 Bcf/d around the contract roll. No active tropical storm or hurricane is threatening the Gulf Coast as of November 2, so storm risk is not currently supporting prices — but Atlantic hurricane season runs through November 30.

Storage Fundamentals

The EIA Weekly Natural Gas Storage Report released Thursday, October 29, reported an 80 Bcf injection for the week ended October 23, above consensus expectations of roughly 70-75 Bcf and above the prior week's 77 Bcf build. It was the first injection above the seasonal average of about 77 Bcf since early August. Total working gas in storage reached 3,724 Bcf — 147 Bcf, or 3.8%, below last year, but 38 Bcf, or 1.0%, above the five-year average of 3,686 Bcf. The South Central region accounted for 43 Bcf of the build, including 23 Bcf into salt storage. The next storage report is due Thursday, November 5, and the market will be watching whether mild weather extends the injection season further into November.

Regional Basis Markets

The Northeast remains two markets at once. Spot prices have been soft on mild weather and ample Appalachian supply: Algonquin Citygate recently traded near $2.085/MMBtu and Transco-Leidy near $1.740/MMBtu. Yet January 2027 forwards at Algonquin Citygate remain above $20/MMBtu — more than five times the national benchmark. The gap is a pipeline problem, not a supply problem: constrained capacity into New England means a single cold snap can still trigger a basis blowout. Enbridge's proposed Project Beacon would add 300 MMcf/d of firm capacity to the Algonquin system, with service targeted as early as November 2030, but it offers no relief for this winter.

Production Trends

Lower-48 dry gas production has bounced back to about 113.3-113.5 Bcf/d over the past week, after averaging 112.1 Bcf/d in October. The EIA forecasts 2026 dry production averaging 112.2 Bcf/d. The rig count tells the price story: Baker Hughes reported oil rigs up two to 462, their highest since early October, while gas rigs fell two to 130, the lowest since early September. With gas below $3.00 and crude above $100, drilling capital continues to favor oil — a slow-burn support for gas prices if production growth stalls into winter.

Broader Energy Complex

Crude diverged from gas last week and again early Monday. WTI settled Friday at $104.12 per barrel, up 2.08% on the week, and Brent settled at $113.43, but both slipped early Monday — WTI to about $100.93, down 1.1%, and Brent to about $110.57 — as Iran-Qatar talks entered a third day and OPEC+ held December production targets steady. Early Monday, heating oil was about $4.6124 per gallon, down 1.4%, and gasoline about $3.0889, down 2.1%. The U.S. average retail gasoline price was $4.23 per gallon, down 5 cents on the week, according to AAA. Elevated crude and refined-product prices keep winter fuel-switching economics tight for dual-fuel buyers in the Northeast.

What Energy Buyers Should Watch

NOAA outlook shifts: any move toward colder 11- to 15-day forecasts is the fastest upside trigger.
Thursday's EIA storage report (November 5): whether injections continue into November.
LNG feedgas: sustained flows near or above 20 Bcf/d tighten the domestic balance quickly.
The first sustained cold snap in the Northeast: watch Algonquin basis, not just Henry Hub.
Contract and budget timing: winter strips at five-year lows reward buyers who act before cold arrives, not during it.

Premier Energy Management Perspective

This is a buyer's window, not a reason for complacency. Mild November weather and a storage surplus to the five-year average are holding prompt prices down, but the forward curve is pricing in exactly the conditions — ample supply, warm forecasts, and strong LNG pull — that a single cold snap can reverse in days. Facilities with winter exposure, especially in New York and New England, should use this softness to review fixed-price, collar, and layered purchasing options while winter strips remain near multi-year lows.

Market Bottom Line

December gas below $3.00 reflects a comfortable start to winter: storage is adequate, production has recovered, and heating demand is delayed. That comfort is conditional. Strong LNG exports, a falling gas rig count, and New England's pipeline constraints mean the market remains one cold forecast away from a sharp repricing. Buyers who lock in structure now are paying for insurance while it is cheap.