This Week’s Energy Market Snapshot
Natural gas and power markets are entering December on a firm footing, driven by colder-weather forecasts, record production, and growing export demand. While near‑term prices are elevated, there may be strategic opportunities for buyers later in the winter.
EIA Natural Gas Storage Report
The weekly EIA Natural Gas Storage Outlook report tracks the volume of natural gas in underground U.S. storage, revealing weekly fluctuations and comparison against 5-year averages.
Natural Gas and Power Prices
Colder-than-average forecasts for the rest of December are helping keep natural gas futures elevated, with the January NYMEX contract hovering around the mid‑$4 range per MMBtu and longer‑dated contracts, such as January 2027, closer to $5.00. Electricity prices have followed suit, with January 2026 power trading above $76.00 per MWh (about $0.076 per kWh) before dropping off sharply in later months.
At the same time, natural gas production just set a new record at roughly 109 Bcf per day. Strong output is helping maintain healthy storage levels even as demand rises and exports move above 18 Bcf per day, with last week marking the first storage withdrawal of the season at 11 Bcf.
WINTER NATURAL GAS PRICING
LNG EXPORTS
Demand and LNG Exports
Liquefied natural gas (LNG) exports continue to expand, reaching nearly 19 Bcf per day last week and approaching current export capacity. Over the next several years, U.S. LNG capacity is expected to grow significantly, with exports projected to reach roughly 28–33 Bcf per day by 2030.
This combination of robust domestic demand in cold weather, strong industrial and power-sector demand, and rising global LNG demand is a key driver of today’s higher forward prices.
What This Means for Energy Buyers
For most customers, it is likely too late to “catch a dip” heading into January, so rushing into a fixed-price contract now may lock in elevated winter premiums. Keeping January volumes on an index rate and watching for a warm spell or a shift in the weather outlook could create a better entry point.
Suppose the widely advertised “colder-than-normal” winter fails to materialize fully. In that case, there may be a window in mid‑January through February where disappointed speculators begin to sell positions, easing prices and opening an opportunity to hedge a competitively priced block of energy.
WEATHER OUTLOOK
Cold air will dominate much of the northern U.S. from December 3–9 as a series of frosty weather systems moves through. Daytime highs will stay mainly in the teens to 30s, with overnight lows dipping below zero in some areas and into the 20s elsewhere. These chilly conditions will drive strong national natural gas demand for heating, especially across the Midwest and Northeast.
Meanwhile, milder weather will hold across the western and far southern states under high pressure, with highs mainly in the 40s to 60s and a few spots reaching the 70s. The East will experience a mix of calm, mild days, ranging from the 30s to the 60s.
Overall, energy demand is expected to remain high through the next several days before easing slightly to moderate-to-high levels later in the period.
NYMEX Natural Gas Calendar Strips
• The NYMEX 12-Month Strip averages the next 12 months of Henry Hub futures into one price. It’s a powerful indicator of market sentiment, allowing traders (and end-users) to lock in year-long coverage at a blended rate.
Watching shifts in this strip helps gauge the broader direction of gas markets, beyond just the prompt month.
NYMEX PRICE TREND ANALYSIS
(PJM) AD HUB DA & FWD TREND ANALYSIS
BAKER HUGHES OIL & GAS WELL COUNTS
Strategy Recommendations
Here are several actionable tactics to consider:
- Focus on reducing premiums in your rate structure wherever possible, especially capacity and other pass‑through components.
- If your facility uses more than 1 million kWh per year, consider a managed index product that lets you layer in blocks of energy when the market dips, rather than committing to a fully fixed, all‑in price.
- Use the managed index structure to stay on the index when prices are high or uncertain, and selectively lock blocks when fundamentals or short‑term weather shifts create value.
Over the past several years, this type of managed index approach has often delivered lower total costs than locking into a long‑term, all‑in fixed rate, while still providing tools to manage risk and avoid surprise price spikes.
Every dollar saved on energy boosts your profit margin.
TPI Efficiency’s Energy Savings Calculator shows exactly where your business can reduce costs—without disrupting operations or requiring upfront investment.
Get your custom benchmark report and see how optimization could improve your ROI immediately.
Calculate your opportunity today and uncover your hidden savings potential.