NG January April 2026 spread

Overview

The January/April 2026 natural gas spread today fell to its lowest value ( for the January versus the April) since November 4, 2024. The spread has followed the flat price lower over the course of the past 5  weeks. The spread peaked on June 20, which is the same day that the spot futures peaked in the past 5 weeks.

The spread is technically nearly oversold. Momentum looks poised to turn positive in the next day or 2, especially if the spread were to stabilize over the current near 90 cent level and rally.
Support for January versus April is possible at the low from November of 2024 of 88.3 cents. Currently, the lower bollinger band in the daily chart intersects just below 90 cents. Today's low for the spread is 90.2 cents.
There is a gap above the current spread price to fill from last week's action. The gap goes from 95.4 to 95.6 cents. There is some decent resistance above that at $1.023/ $1.026.

Open interest for the January 2026 futures contract has grown since the June 20 peak seen in the spot futures. Open interest for the January futures on the CME stood then at 136,743 contracts. Open interest for the January 2026 futures as of Friday's close  stood at 150,413 contracts. We would lean to there being more new shorts than longs in and of itself in the January 2026 contract over the past 5 weeks given the fall in the futures price. Thus, we wonder if short covering/fresh buying for the January 2026  futures contract would not also boost the spread value versus April 2026.

A few colleagues offered a bullish view of the January 2026 contract, citing in particular the expected strong growth in AI center gas demand. We would add that the current somewhat low level of European gas storage and the trade deal announced today that calls  for the EU to purchase LNG from the U.S. are supportive elements for the next winter's NG/U.S. based pricing.

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