Pricing Update
Natural gas prices have continued to slide in early January. Forward pricing for March, April, and May has dipped below $3.00/MMBtu, while next January is trading around $4.50/MMBtu—nearly 50 cents lower than just a few weeks ago.
Production remains steady at 107.1 Bcf/d, with little change expected as this winter’s mild conditions reduce the risk of freeze-offs and weather-related disruptions.
Capacity Market Notes
The Base Residual Auction for the 2027/2028 delivery year (June–May) cleared slightly higher at $333.44 per MW-Day. However, for the first time, the auction fell short of securing enough capacity to meet projected demand by more than 6,000 MW.
This shortfall raises reliability concerns looking ahead, including the potential for rolling brownouts or blackouts if capacity doesn’t improve. PJM could even hold a supplemental capacity auction, similar to what occurred in 2015/2016.
Weather Outlook
Most of the U.S. will see warmer-than-normal temperatures this week, with highs in the upper 40s to 70s and occasional 80s in the far South. Only regions along the Canadian border will experience typical winter cold, with highs in the teens to 30s. Overall, natural gas demand remains very light for the next seven days.
NYMEX PRICE TREND ANALYSIS
Recommended Actions
With natural gas prices trending lower, now may be a favorable window to review your hedging strategy.
- Consider locking in up to 50% of your March–May load if prices drop near $41–$42/MWh.
- Given the tightening capacity outlook, evaluate backup solutions such as on-site generation, solar-plus-storage, or power-quality equipment.
- Explore participation in Demand Response programs that offer incentives to reduce consumption during peak demand events.
(PJM) AD HUB DA & FWD TREND ANALYSIS
LNG Exports
NYMEX PRICE TREND ANALYSIS – NEXT 24 MONTHS
Natural Gas Production
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