Market Overview
As we move closer to winter, both natural gas and electricity markets are showing signs of seasonal tightening. Prices have been trending upward, reflecting cooler temperatures and shifting supply dynamics.
Pricing Trends
Natural gas and electricity pricing are on the rise. The NYMEX January contract has climbed nearly $0.40 over the past two weeks. Power markets are following suit, with the Day Ahead Indexing up $0.002 per kWh. These increases signal a market preparing for heavier winter demand ahead.
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 SETTLEMENT PRICE HISTORY
Supply Conditions
While gas storage injections have recently slowed, inventory levels have now surpassed both the five-year average and last year’s totals. With mild weather expected over the next 6–16 days, injections are expected to remain steady.
Production, however, has dipped slightly from record highs, down from 108 Bcf/d to 105.2 Bcf/d. Despite this, supply levels remain healthy. It’s worth noting that natural gas pricing for winter 2025 remains below last winter’s levels, which were impacted by more typical seasonal temperatures.
WINTER 2025/2026 NATURAL GAS PRICING
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.
Demand Drivers
Liquefied Natural Gas (LNG) exports are strong again at nearly 17 Bcf/d, supported by growing European demand as winter approaches. The Plaquemines and Corpus Christi LNG facilities have recently expanded capacity, contributing to higher export volumes. Additionally, the Golden Pass LNG facility has begun taking small volumes of test gas, marking another step in its capacity growth.
If U.S. production does not rise by at least 2.0 Bcf/d, inventories could tighten further, leading to continued upward pressure on prices.
Natural Gas Production
TPI Insight: Strategic Purchasing
Now may be a good time to consider buying small blocks of energy for the upcoming 2025 winter season—possibly covering around 25% of next summer’s needs as well.
Electricity pricing for 2026 has started to trend downward and now appears more favorable, as forecasts suggest natural gas prices—responsible for 40% of electricity generation—will remain lower than initially expected.
For larger users (those consuming over 1 million kWh annually), a managed index product can be highly beneficial. This strategy enables you to capitalize on market dips while maintaining protection against sudden price spikes. Keeping a portion of your supply indexed often proves more cost-effective than locking in at a fixed all-in rate.
Weather Outlook (Oct 6–12)
A cooler air mass moved through the Plains early this week, delivering showers and daytime highs in the upper 50s to 60s. That system is expected to track into the Great Lakes and Northeast midweek. Meanwhile, the rest of the country will see mild to warm conditions, with highs in the 70s to 90s—hottest across Texas and the Southwest deserts. Showers are expected to reach the Pacific Northwest next weekend.
Overall, energy demand is expected to stay light to moderate through the week.
Power & Price Movements
- Forecasts for extended warm temperatures and active cash market trading have supported early-week power price increases.
- The latest power market activity demonstrates resilience, with strong liquidations during evening peaks contributing to near-term strength.
- National power demand is expected to remain low next week, with near-perfect fall weather in most regions.
Capacity Rates to Jump Again
PJM’s latest capacity auction results signal rising costs in the region, with AI data center demand a major driver of higher bills and increased volatility. Some forecasts suggest rates could jump up to 60% over the next five years in the PJM area.
LNG Exports
Increasing export capacity driving steady demand.
