NEW YORK/LONDON/SINGAPORE — Dec. 24, 2025 — U.S. natural gas futures were softer in holiday-thinned Christmas Eve trading, giving back part of Tuesday’s sharp rebound as traders reassessed near-term weather forecasts, the durability of record LNG-driven demand, and the winter storage trajectory.
By late morning, NYMEX Henry Hub natural gas futures were trading around $4.29 per MMBtu, down from the prior close near $4.41, with prices moving inside a session range roughly spanning the low-$4.20s to the mid-$4.50s.
That pullback comes after a dramatic “risk-on” reset earlier in the week. On Tuesday, front-month U.S. gas futures surged roughly 4% amid record-high feedgas flows to U.S. LNG export plants and expectations for higher demand in the next two weeks. Baird Maritime / Work Boat World
Natural gas price action today: a post-rally breather in holiday trade
The story of natural gas on December 24, 2025 is less about a single headline and more about the market’s tug-of-war:
- Bullish forces: LNG exports are running exceptionally strong, and the market is still digesting a winter that began with a meaningful cold push.
- Bearish forces: Weather models have been prone to whiplash; even small shifts warmer can quickly reduce heating demand expectations—especially when trading liquidity is thin around the holidays.
The result: volatile, sometimes abrupt swings that can look outsized relative to the fundamental change on any one update—particularly in a shortened, lightly staffed session.
The big driver: weather forecasts are still the steering wheel
Weather remains the primary near-term catalyst because it changes residential and commercial heating demand faster than production can respond.
Recent industry tracking shows demand has already eased from early-December highs, with heating degree days (HDDs) down week-over-week in the latest readings—one reason futures have struggled to hold the most aggressive winter premium.
At the same time, the U.S. government’s baseline forecast still leans firm for the winter as a whole. In its latest Short-Term Energy Outlook (released Dec. 9), the U.S. Energy Information Administration (EIA) raised its winter view and now expects the Henry Hub spot price to average around $4.30/MMBtu this winter (Nov–Mar), citing colder-than-expected December conditions.
The EIA also notes it is assuming December HDDs are 8% above the 10-year average, a meaningful demand tailwind—though it also expects milder-than-normal weather in early 2026 to help cool prices after winter.
LNG exports: the strongest pillar under U.S. prices, but not without limits
The modern U.S. gas market increasingly trades like a hybrid of domestic utility fuel and global seaborne commodity—and LNG is the bridge.
On Tuesday, Reuters-reported market coverage highlighted record flows to LNG export plants, with average feedgas flows to major facilities rising to about 18.5 Bcf/d so far this month, above the prior monthly record.
EIA’s weekly market update underscores just how large the LNG channel has become: in the week ending Dec. 17, 33 LNG vessels departed U.S. ports with a combined capacity of about 126 Bcf.
The risk traders are watching: shrinking LNG margins
Even with strong flows today, the market is increasingly focused on whether U.S. LNG economics remain compelling if domestic gas prices rise while global benchmark prices soften.
Reuters analysis earlier this month described a margin squeeze: Henry Hub prices have risen while European and Asian prices eased, narrowing the spread that supports U.S. LNG profitability.
For now, LNG demand is still acting as a stabilizer for U.S. prices. But this margin discussion is important because it frames the key “next-level” risk: if the spread compresses far enough, exports become the release valve.
Storage: withdrawals are above normal, and the winter balance matters
Storage is the market’s scoreboard in winter. The latest EIA weekly update (covering the report week ending Dec. 17) showed:
- Net withdrawals of 167 Bcf for the week ending Dec. 12, well above the five-year average withdrawal for that week.
- Working gas inventories of 3,579 Bcf, slightly above the five-year average, but below year-ago levels.
The EIA’s broader winter outlook expects December to be a heavy withdrawal month. It forecasts 580 Bcf withdrawn during December, about 28% above the five-year average for the month, and projects end-of-winter storage near 2,000 Bcf (about 9% above the five-year average).
This is why even modest shifts in temperature guidance can move prices sharply: storage draws compound quickly during cold spells, and futures reprice the end-of-winter level in real time.
Production and rigs: supply is strong, but winter can still bite
Record or near-record production has been the market’s counterweight to winter weather risk.
One reason the supply story still looks resilient: U.S. drillers have not meaningfully pulled back activity in a way that would suggest imminent supply stress. In Baker Hughes’ holiday-adjusted rig count update, U.S. firms held gas rigs around 127, with total oil-and-gas rigs rising slightly week-over-week (though still down year-over-year).
The EIA also expects U.S. output to remain high into next year: it projects dry natural gas production averaging about 109 Bcf/d in 2026, up from 2025 levels.
That said, winter is the season when production can still surprise to the downside due to freeze-offs and operational interruptions—so the market continues to price some risk premium.
Europe today: TTF eases as colder risks moderate
Across the Atlantic, European gas pricing remains sensitive to weather, storage levels, and LNG arrivals—especially with the region still navigating the post-Russian pipeline era.
On Dec. 24, Europe’s benchmark Dutch TTF front-month eased to around €27.36/MWh (about $9.47/MMBtu) by mid-morning London time, as forecasts suggested a potentially quicker end to a cold spell and supply stayed stable.
While Europe’s price level remains far above the ultra-cheap periods of the pre-2022 era, the market has become more two-sided: warm forecasts can soften prices quickly, while cold snaps still have the power to ignite rapid rallies.
The structural backdrop: policy shifts continue
Europe’s long-run gas architecture is also being reshaped by regulation. Reuters reported the European Parliament approved the EU plan to phase out Russian gas imports by late 2027, pushing the bloc toward longer-term reliance on LNG and alternative pipeline sources.
Asia today: spot LNG edges up with South Korea demand in focus
In Asia, spot LNG prices have been supported by incremental winter buying, particularly where cold weather looks imminent.
A financial-market report citing Argus noted that South Korean buying interest emerged with temperatures expected to fall to two-year lows on Dec. 26, and that cargoes have been diverted from China to South Korea in recent weeks.
This matters for U.S. gas because Asia is a major sink for Atlantic Basin LNG when economics work—supporting feedgas demand back in the United States.
Today’s LNG headline: Petronas signs new supply deal with China’s CNOOC
One of the most consequential “quiet” forces in gas markets is the steady accumulation of long-term LNG contracts—the contractual plumbing that underwrites new liquefaction capacity.
On Dec. 24, Reuters reported Malaysia’s Petronas signed an agreement to supply 1 million metric tons per annum of LNG to CNOOC Gas and Power in Singapore, deepening an existing relationship.
Deals like this don’t usually move Henry Hub futures minute-by-minute, but they reinforce the macro reality: LNG remains a structural growth channel, even as short-term weather dominates the daily tape.
Natural gas forecast and outlook: what the market is pricing into early 2026
Putting today’s cross-currents together, the clearest near-term framework looks like this:
Base case: choppy but supported
- Prices stay volatile into year-end due to thin holiday liquidity and frequent weather model revisions.
- Strong LNG flows help put a floor under dips, unless global spreads compress sharply.
Bull case: sustained cold plus big draws
- If colder-than-normal weather persists longer than expected, storage withdrawals can accelerate—consistent with the EIA’s view that December is already running cold relative to assumptions.
Bear case: a warm turn plus strong production
- If forecasts shift meaningfully warmer into early January, heating demand falls fast.
- With production strong and rigs steady, the market can quickly shed winter risk premium.
The 2026 anchor
EIA expects Henry Hub to moderate after winter with milder early-2026 weather and rising production, averaging around $4.00/MMBtu next year in its baseline outlook.
What to watch next
Natural gas traders and energy consumers are likely to keep a close eye on:
- Weather model trends (especially late-December and early-January HDD forecasts).
- Weekly storage dynamics and whether withdrawals remain above normal.
- LNG feedgas flows and any terminal disruptions, given LNG’s outsized role in demand.
- Global LNG contract news that signals longer-term demand growth (e.g., Petronas–CNOOC).
- Policy and supply-chain developments that change global balances, such as Europe’s Russian gas phase-out timetable and other LNG-related regulation.
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