Natural Gas Pricing and Storage
- The recent arctic blast and powerful storm along the Eastern Seaboard were not enough to reverse the overall bearish trend in the natural gas market, and the March contract is on track to settle below 3.00 per MMBtu.
- The latest storage report showed a withdrawal of 144 Bcf, in line with expectations, leaving inventories about 5.6% below the five‑year average. tradingeconomics
- With March projected to run warmer than normal in many regions, weekly withdrawals should shrink, and storage levels could move back above the five‑year average as injection season begins.
Forward Hedge Opportunities
- Don’t overlook the far end of the curve: 2029 power is currently pricing lower than many expected, with much of the year trading around 45.00 per MWh, creating an attractive long‑term hedge window for risk‑averse buyers.
PJM Capacity Price Collar Extended
- Pennsylvania’s governor reached an agreement with PJM to extend the existing capacity “price collar” (floor and cap) for an additional two years.
- The capacity price cap will remain at 325 per MW‑day through 2030, helping temper potential cost spikes as PJM wrestles with rapid demand growth driven largely by data center development and electrification.
What this Means for your Strategy
- If you are on a NYMEX‑indexed natural gas strategy or a managed index product for electricity, it still makes sense to ride this downward price trend into spring. February’s average power cost is tracking near 68.38 per MWh, with room to tick a bit lower by month‑end, and the next four months are all currently below 45.00 per MWh.
- The 2027/2028 PJM capacity auction failed to procure enough capacity to fully cover forecasted demand, increasing the real risk of rolling brownouts or blackouts during extreme conditions.
- Now is the time to evaluate resilience measures such as backup generators, solar paired with battery storage, and power-quality solutions to help your facilities ride out potential grid events.
- Given elevated capacity costs and tighter reserve margins, you should also consider enrolling in a Demand Response program, which can pay you to curtail during grid stress and may offer additional performance bonuses for successfully reducing load during peak events.
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.
WINTER 2025/2026 NATURAL GAS PRICING
Market Outlook and Action Items
- Monitor next winter’s pricing. While still elevated, keep an eye out for dips below $50/MWh as potential trigger points for small hedges.
- Don’t overlook long-term opportunities. Spring and summer 2029 are currently priced low—consider hedging 25–50% of those months.
- Plan for grid reliability risks. The 2027/2028 capacity auction fell short of securing enough reserve energy, raising concerns about possible rolling blackouts. Now is the time to evaluate resilience measures like backup generators, solar with battery storage, and power-quality systems.
- Take advantage of Demand Response. With capacity costs elevated, enrolling in a Demand Response program can reduce costs and even earn payments for reducing load during peak demand events.
NATURAL GAS PRODUCTION, LOWER 48 STATES
NYMEX PRICE TREND ANALYSIS
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.
(PJM) AD HUB DA & FWD TREND ANALYSIS
This chart illustrates the trend in wholesale power prices at the PJM AEP Dayton Hub (often abbreviated as AD Hub) in the day-ahead (DA) market compared to forward (FWD) or futures prices over time.
NYMEX PRICE TREND ANALYSIS – NEXT 24 MONTHS
Weather and Demand Outlook
Weather and demand outlook: Feb 25 – March 2
- Chilly air continues to grip the Midwest and Northeast today, with highs only in the teens to 30s and lows dipping into the single digits and 20s, while the rest of the country enjoys milder 40s–70s.
- From Thursday through Saturday, much of the U.S. turns seasonably comfortable, with highs in the 40s–80s and very limited subfreezing air, before cooler conditions return to the northern tier late in the weekend for a brief early‑March cooldown.
- For natural gas, that translates into elevated space‑heating demand today, followed by several days of relatively low demand from Wednesday through Saturday as milder temperatures spread across most major load centers.
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