Natural Gas --January April 2026 Spread

Overview

The January April natural gas spread has fallen in line with the drop in the flat price over the past week. Also some of the pressure on the spread may have been due to rolling seen by index funds this week as the funds sold length in the January contract to roll their longs forward to March. Last week before the index fund roll began, we saw massive trades executed in the January April spread in the $1.03 to $1.10 area.

Yet, we see some technical elements that suggest that the spread has found support. The settlement Thursday has a mean reversion setup with the settlement price of 68.2 cents being below the lower bollinger band then. Also, the spread has fallen to an area of decent support at the 65.5-65.9 cent area. Below that support lies at 60.5 cents. Resistance comes in above at 82.2-82.4  cents and then at 91.5-91.8 cents.
Momentum for the spread, though, is negative basis the daily chart at present. Oddly enough, the January April spread is actually trading presently wider by 2 cents--even as the spot January futures are printing lower by 11.5 cents. 

Possibly supportive for the spread is the EIA's outlook from this week in which they raised their winter strip (November thru March) price forecast to $4.30 from their November STEO forecast of $3.90. They raised their price expectation due to their seeing colder than expected weather in December.  

Enjoyed this article?

Subscribe to never miss an issue. Daily updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.

Click below to view our other newsletters on our website:

Ethanol Update 

Natural Gas Update

Fuel and Freight Daily Report

Disclaimer

This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC