Natural Gas Market Moves Higher on Colder Weather
The January ’26 NYMEX natural gas contract closed last week at $4.37, rebounding after several weeks of weakness. A slightly colder forecast revision for early January helped lift forward curves and reverse sentiment following two weeks of declines.
Production remains strong at 108.1 Bcf/d, roughly flat month-over-month. LNG activity has also ticked higher, with Plaquemines and Calcasieu facilities increasing volumes and total LNG feedgas hitting 18.9 Bcf/d today.
Due to the Christmas holiday, there was no EIA storage report last week.
Oil markets also gained ground, rising $1.50 amid heightened geopolitical tension. A meeting between President Trump and President Zelenskyy on a volatile peace agreement comes as Middle East conflicts accelerate, following Saudi airstrikes in Yemen and Iran’s declaration of “full-scale war” with the U.S., Israel, and Europe.
EIA Natural Gas Storage Report
Due to the Christmas holiday, there was no EIA storage report last week.
Weather Outlook: Dec 30 – Jan 4
Cold systems are sweeping across the Midwest, Ohio Valley, and Northeast, bringing highs in the 10s–30s and lows from below zero into the 20s. This cold snap will drive strong regional heating demand through the first week of January.
Elsewhere, much of the country remains seasonally mild, with highs in the upper 40s to 70s. Texas and parts of the South will see occasional cool-downs, with lows dipping into the 30s and 20s in some areas.
Expect moderate to high national energy demand through the next six days, before conditions ease later in the period.
PJM Capacity Auction: The “New Normal” Solidifies
PJM’s latest Base Residual Auction for the 2027/28 delivery year cleared at the FERC-approved cap of $333.44/MW-day, securing 134,479 MW of capacity—yet still falling short of reliability targets.
The message is clear: capacity prices are staying elevated, and grid reliability remains tight. As data centers, electrification, and extreme weather continue to reshape load patterns, volatility risk is on the rise.
For businesses, capacity expenses will remain a key cost driver in 2026 and beyond. Now is the time to explore strategies to reduce capacity tags, enhance efficiency, and optimize supply contracts ahead of upcoming market shifts.
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(PJM) AD HUB DA & FWD TREND ANALYSIS
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