Energy Market Snapshot October 28, 2025

Natural Gas Pricing Trends

As November Prompt Month pricing settles and December begins, we’re starting to see the more expensive 2026 pricing come into play. Winter-month natural gas contracts are currently in the high $3.80s per MMBtu, with January trading around $4.155. Looking further ahead, Winter 2026–2027 is trending closer to $4.75, reflecting steady demand growth—particularly from liquefied natural gas (LNG) exports.

Weather Snapshot | October 27 – November 3

A series of weather systems will move across the northern and eastern U.S., bringing showers and cooler conditions with highs in the 40s–60s and lows in the upper 20s–40s. Even Texas, the South, and the Southeast will feel cooler air this week.

Meanwhile, high pressure will dominate the Western states, keeping temperatures in the 50s–70s, with some areas in the Southwest reaching the 80s.

Overall, national energy demand is expected to remain moderate through the next seven days.

Natural Gas Supply Overview

Supply fundamentals remain healthy as we continue to see robust injections into storage. Last week’s injection of +87 Bcf exceeded both last year’s and the five-year average levels.

Current natural gas production stands at 107.5 Bcf/d.
National storage levels are approaching 4,000 Bcf heading into winter—close to record highs against a total capacity of just over 4,300 Bcf.

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.

Demand Outlook

LNG exports continue to set new records, surpassing 17.0 Bcf/d as additional facilities and trains come online. Over the next decade, export volumes could nearly double as global demand for U.S. natural gas grows.

Meanwhile, the National Weather Service (NOAA) projects a colder-than-normal winter—especially across the Upper Midwest, Pacific Northwest, and portions of the Northeast—likely driving stronger heating demand over the coming months.

WINTER 2025/2026 NATURAL GAS PRICING

Supply and Demand – Neutral

Natural gas markets firmed this week, with the November NYMEX contract up 14% to $3.44/MMBtu, supported by cooler weather forecasts, strong LNG feedgas demand, and lower output.

Storage: For the week ending October 10, inventories rose 80 Bcf to 3,721 Bcf, 4.3% above the five-year average.
Production: Output averaged 106.3 Bcf/d, up 4.8% year-over-year.
Electricity: 2026 power forwards climbed 3–11% across most U.S. regions except ERCOT, which fell 3%.

Customer Takeaway: Gas and power prices are edging upward on tighter fundamentals. Cooler weather and increased LNG feedgas demand are gradually rebalancing the market, signaling a potential shift away from oversupply conditions.

NATURAL GAS WEEKLY PRODUCTION

LNG EXPORTS

Strategic Recommendations

With energy markets entering their seasonal volatility period, consider risk management strategies that balance flexibility and protection:

Procurement: Secure small energy blocks for the 2025 winter and a limited position (around 25%) for next summer as a hedge against volatility.
Horizon Planning: Expect electricity pricing to peak in 2026, then level off and potentially decline in 2027–2028.
Cost Control: Eliminate capacity and other rate premiums wherever possible.
For Large Users: Businesses consuming over 1 million kWh annually should explore managed index products—allowing you to buy energy blocks on market dips (like now) or lock in protection when prices are poised to rise. Historically, indexed strategies have delivered lower costs compared to fixed all-in rates.

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.

(PJM) AD HUB DA & FWD TREND ANALYSIS

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