Energy Market Insights Newsletter
SUPPLY TRENDS
- Sturdy Natural Gas Supply: Injection rates are solid at 16.3Bcf/d. At this pace, we’re likely to surpass the five-year average for natural gas storage this September.
- Oil Production Pullback: U.S. oil producers have trimmed output as prices hover near $65.00, which could modestly reduce natural gas produced as a byproduct.
DEMAND DEVELOPMENTS
- LNG Exports Surge: LNG exports are back above 16Bcf/d, close to full capacity. If exports reach their maximum, an additional 24.5 billion cubic feet (Bcf) could be withdrawn weekly from domestic storage.
- Hurricane Impact: Land-based drilling has shifted hurricane risks from supply to demand. Major storms now cut demand as power outages spread across regions, often pushing energy prices lower. High winds can also halt LNG shipping, causing more gas to accumulate domestically.
- Long-Term Changes: Over the next five years, LNG export capacity is set to double from just under 17Bcf/d to 33.5Bcf/d by 2030. Expect a major reduction in available supply unless new production ramps up.
- Midwest Cooling: A cooler forecast over the next 6-10 days is likely to temper demand, bringing relief after recent heat waves.
NATURAL GAS EXPORTS LNG & MEXICO
ACTION ITEMS FOR BUYERS
- Winter Prep: Consider buying small blocks of energy for winter 2025 and perhaps a 25% block for next summer as a precaution.
- Contract Strategy: Short-term contracts for 2026 alone could be costlier than blending rates with 2027-2029 pricing.
- Rate Optimization: Eliminate unnecessary premiums on capacity or other rate components.
- For Large Users: If you use more than 1 million kWh/year, a managed index product gives you flexibility—allowing opportunistic purchases when prices dip and protection during price spikes.
WINTER 2025 NATURAL GAS PRICING
JANUARY 2026 NATURAL GAS PRICING
NYMEX NAT GAS CALENDAR STRIPS
• The NYMEX Twelve Month Strip is the average of the upcoming 12 months of closing Henry Hub natural gas futures prices as reported on CME/NYMEX.
• A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction.
• The NYMEX Twelve Month Strip can lock in a specific price for natural gas futures for a year with 12 monthly contracts connected into a strip.
• The average price of these 12 contracts is the particular price that traders can transact at, indicating the direction of natural gas prices.
⚡ Electricity Update
HIGH DEMAND FORECAST: JULY 29-30
- Peak Use Ahead: Anticipate additional peak demand alerts. The grid is expected to exceed 159,120 MW on Tuesday (July 29) and 154,952 MW on Wednesday (July 30), driven by widespread high temperatures.
- Peak Hours: 4:00 PM – 7:00 PM EDT
PRICING OUTLOOK & IMPACTS
- Upcoming Cost Increase: Starting June 2025, expect electricity costs to rise by approximately 15-20% due to recent PJM auction results.
- Longer-Term Pressures: Growth in AI, manufacturing, electrification, and EVs is ramping up demand. Combined with planned supply closures, costs are expected to rise further over the next 7 years.
📈 Strategies to Address Rising Costs
- Energy Hedging: Hedging can reduce exposure by up to 15% versus fixed rates.
- Expert Consultations: Take advantage of complimentary onsite energy audits to identify efficiency opportunities.
- Discover all possible Energy Conservation Measures.
- Enhance reliability with backup solutions.
- Explore renewable and on-site generation options.
- Improve operations to cut peak usage.
- Contract Review: Negotiate and adapt agreements to avoid volatile capacity costs.
- Improve Efficiency: Invest in demand management and distributed generation (solar, batteries) to buffer price shocks.
- Engage Experts: Work with professionals to optimize cost management strategies.
🚩 PJM Market Alert
- PJM 2026-27 Capacity Auction: Prices hit the FERC cap at $329.17/MW-day, a 21% jump from last year. Rising costs have prompted some states to reconsider their participation in PJM—calls for reform or exit may intensify.
- Many businesses are just now seeing their first monthly bills reflecting these 2025/26 capacity increases.
☀️ Weather Outlook (July 28 – Aug 3)
- Hot Pattern Continues: A strong high-pressure system will keep much of the U.S. very warm to hot (highs of 80s-100s, especially in the Southwest and Texas).
- Demand to Moderate Later: Weather systems moving through late week should bring cooler temperatures (70s-80s), easing electricity demand nationally.
PJM AD HUB DAY AHEAD & FORWARD TREND ANALYSIS
NATURAL GAS PRODUCTION
Do you have questions or Would You like a Custom Strategy?
Contact our experts for tailored market analysis, contract reviews, or an onsite audit to ensure you’re protected in a volatile market.