Highlights

  • December Henry Hub futures settled at $3.296 per MMBtu on 10 November, the strongest close in about seven weeks.
  • Money managers hold a record 636,576 short positions across Henry Hub contracts, which may explain this week's rapid gains.
  • US LNG feedgas averaged a record 19.3 billion cubic feet a day in November, keeping export terminals at full capacity.
  • EQT holds fourth-quarter collars on about 1.2 MMDth a day, softening its short-term sensitivity to futures prices.

What happens when a record number of traders bet against Natural Gas and the forecast turns cold? This week, prices jumped. The December Henry Hub contract settled at $3.296 per million British thermal units on 10 November, up 7.8 cents and its highest close since 24 September, after a 7.3% gain on Monday. For EQT (NYSE:EQT) and Tourmaline (TSX:TOU), the rally raises a second question: does the cold last long enough to matter?

Cold Forecasts Meet Crowded Positioning

Weather is the most clearly documented driver. A storm could bring the season's first snow to parts of the Northeast, with colder temperatures across the East afterwards, and forecasts for the next two weeks have turned colder with higher Demand than previously expected. Positioning has mattered too: money managers hold a record 636,576 short positions across Henry Hub contracts, and speculators' net short positions on NYMEX and ICE are the largest since March 2020. The two measures differ, but both describe heavy bearish positioning, and short covering is a plausible, not proven, explanation for the speed of this week's gains.

Not everyone expects the cold to last. Forecasts show a below-normal spell in the East from 16 to 20 November, followed by a return towards normal temperatures. On Wednesday the contract hit a session high of $3.397 before sellers moved in.

Supply, Storage and LNG Demand

Production has eased from its summer peak. Lower 48 output has averaged 112.3 billion cubic feet a day so far in November, against 113.4 in October and a monthly record of 115 in August. Feedgas to US LNG plants has averaged a record 19.3 billion cubic feet a day, while European TTF trades near $28 per MMBtu and Asian LNG near $29, several times the US price.

Storage remains comfortable at about 3,801 billion cubic feet, 54 above normal, and traders expected a 65 billion cubic feet injection for the week ended 6 November. The federal storage report has been pushed back by a day for Veterans Day.

Official Forecasts Point the Other Way

The EIA's November outlook is more bearish than the futures market. It expects the Henry Hub Spot Price to average $2.87 per MMBtu from November to March, with annual averages of $3.37 in 2026 and $2.88 in 2027, and NOAA's outlook still leans warm under a strong El Niño. Those are whole-season spot averages, while NGZ26 is a single futures month, so the two are not directly comparable. The gap does show the risk to prices if the cold fails to arrive.

How Listed Producers Are Exposed

EQT sold 583 Bcfe in the third quarter at an average realised price of $2.72 per Mcfe. For the fourth quarter it holds collars on about 1.2 MMDth a day, with long puts at $3.72 and short calls at $5.13, and it has agreed to acquire Range Resources, subject to approvals. A 10-year LNG sales agreement with Lithuania's Ignitis Group means part of its future Revenue may track international gas prices.

Tourmaline produced about 2.9 billion cubic feet a day of gas in the third quarter, mostly priced at Canadian hubs such as AECO rather than Henry Hub, and has hedged 887 million cubic feet a day for the rest of 2026 at about C$5.07 per mcf. Its 2027 outlook assumes NYMEX gas at US$3.21 per MMBtu.

What to Watch Next

The delayed storage report is the next scheduled test, alongside Friday's CFTC data on whether short covering continues and NOAA's 6–10 and 8–14 day outlooks. The December contract expires in late November, so Volatility may rise as positions roll into January. If forecasts warm or injections beat expectations, recent gains could reverse quickly; if cold arrives while LNG demand stays at records, the large short position could add to upward pressure.