NYMEX Natural Gas Market Update — January 12, 2026

Tony Zelinski
3 days ago
3 min read

The natural gas market opened the week under renewed pressure as warmer‑than‑normal temperatures and a softening demand outlook continued to weigh on futures. After last week’s volatility, the market remains highly sensitive to shifting weather models, storage withdrawals, and LNG feedgas strength — but the dominant theme heading into mid‑January is mild weather overwhelming otherwise supportive fundamentals.

📈 Price Action: Futures Slip Below $3.25/MMBtu

U.S. natural gas futures traded near $3.23/MMBtu on January 12, down nearly 20% month‑over‑month and almost 18% year‑over‑year. The decline reflects:

• A milder two‑week temperature outlook, especially across the South and Midwest

• A brief cold spell (Jan 9–15) that failed to lift demand materially

• Persistent selling pressure following last week’s sharp drop to $2.82/MMBtu, the lowest since October 17

The February 2026 NYMEX contract last settled at $3.525/MMBtu as of January 7, but the market has since drifted lower as weather models trended warmer.

🌡️ Weather: Warm Pattern Dominates Mid‑January

Forecasts show:

• Warmer‑than‑normal temperatures across most of the U.S. through late January

• Limited cold confined to northern regions

• A short-lived cold push in the central U.S. (Jan 9–15) that failed to boost heating demand meaningfully

This warm pattern is the primary bearish driver suppressing futures.

📦 Storage: Strong Withdrawal, But Not Enough to Shift Sentiment

The latest EIA report showed a 114 Bcf withdrawal, well above both last year and the five‑year average.

Despite the bullish withdrawal:

• Weather continues to overshadow fundamentals

• Storage remains comfortable for mid‑winter

• Traders are waiting for a more sustained cold signal before repositioning

🚢 LNG Feedgas: Near Record Highs Continue

LNG remains a structural pillar of support:

• Feedgas flows are averaging ~18.5 Bcf/d in January

• This is near record levels and reflects strong global demand

• LNG strength is helping offset mild domestic weather, but not enough to reverse the broader price trend

🛢️ Production: Slight Decline Adds Subtle Support

Domestic production has eased slightly:

• Output has dipped to 109.2 Bcf/d, down from December’s record highs

While supportive, the production decline is modest relative to the scale of weather‑driven demand losses.

📊 Technical Picture: Market Searching for a Floor

• The market briefly bounced last week from $2.82/MMBtu, a key technical support level

• But the failure of cold weather to materialize has kept rallies short‑lived

• Momentum remains bearish unless late‑January models trend colder

🔭 What to Watch This Week

1. Weather Model Updates (ECMWF & GFS)

Any shift toward a colder late‑January pattern could spark a rebound.

2. Thursday’s EIA Storage Report

Another above‑average withdrawal could tighten balances.

3. LNG Feedgas Stability

Flows near 19 Bcf/d remain a critical bullish anchor.

4. Production Trends

Further declines could help stabilize prices.

📌 Final Takeaway

The NYMEX natural gas market enters the week of January 12 under clear bearish pressure, driven overwhelmingly by warm weather and soft heating demand. Strong LNG exports, a bullish storage withdrawal, and easing production offer support — but not enough to counteract the dominant meteorological narrative. Until models show a meaningful cold shift, futures are likely to remain range‑bound with a downward bias.

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