ENERGY MARKET UPDATE: August 28, 2025
Natural Gas Pricing
Natural gas pricing remains soft as mild temperatures across most regions have suppressed weather-driven demand. Market direction is highly dependent on weather forecasts, with little movement expected until stronger heating or cooling requirements emerge
WINTER 2025/2026 NATURAL GAS PRICING
Natural Gas Demand
- Long-term LNG expansion: Over the next five years, U.S. LNG export capacity is expected to nearly double, from just under 17.0 Bcf/d to 33.5 Bcf/d by 2030.
- This expansion (notably at the Plaquemines, Corpus Christi, and Golden Pass LNG facilities) will increase demand and could materially impact available supply unless production keeps pace.
- Short-term shifts: Appalachian spot prices are nearing $1.50/MMBtu, raising the possibility of production throttling or shut-ins in coming weeks as cooling demand rapidly collapses. Forecasts now call for the coolest August–September period since 2009.
WINTER 2025/2026 NATURAL GAS PRICING
Futures & Forward Look
NYMEX natural gas futures fell to a nine-month low, with September contracts closing at $2.69/MMBtu—the weakest since November, largely due to unseasonably cool forecasts.
The Rolling Prompt Month Chart offers a continuous price visual for nearest-term NYMEX contracts.
The NYMEX Twelve Month Strip averages the next 12 months of Henry Hub futures prices, aiding planning and multi-month price locking.
Calendar strips represent aggregate pricing for sequential months, used for longer-term hedges and risk analysis.
Natural Gas Supply
Weak injection: Only +13 Bcf was injected into storage last week, leaving pricing unchanged and at favorable levels.
Outlook for winter: Pricing for next winter is expected to remain below last year’s numbers, which were driven up by more typical winter conditions.
Record production: Last week saw new highs at 108.5 billion cubic feet per day (Bcf/d) in natural gas production, reflecting sustained domestic supply growth.
Natural Gas Storage Outlook
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
A chart highlighting the monthly and yearly settlement prices for NYMEX natural gas futures contracts, revealing how prices have responded to supply, demand, and weather over time.
What Should Buyers Do?
Consider securing small blocks of energy for winter 2025 and possibly 25% for summer needs as insurance.
Shorter contracts for just 2026 are likely to be more expensive than “blended” contracts extending into 2027-2029.
Eliminate premium elements, such as capacity, from your energy rates whenever possible.
Large energy users (over 1 million kWh/year) should explore managed index products to allow opportunistic purchases during price dips or to hedge against price rallies.
Market Watch & Risk
A key question for the months ahead is whether production growth will keep pace with demand, or if pipeline constraints through the second half of 2026 may trigger periods of undersupply and higher prices. Mild weather remains a bearish risk, but there are structural bullish risks as we move into early 2026.
Natural gas weekly storage surplus may top 200 Bcf above five-year norms as moderate tightening in supply/demand dynamics isn’t enough to offset mild conditions. Price volatility is expected as September contract expiry and settlement occur this week.
NATURAL GAS PRODUCTION
PJM AD HUB DAY AHEAD & FORWARD TREND ANALYSIS
This analysis tracks historic and current prices for electricity at the PJM AD Hub, comparing day-ahead spot markets and forward contracts to illustrate short- and long-term market trends.
Electricity: Did You Know?
- 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.
Stay tuned for updates that matter most to your energy decisions and reach out for guidance on hedging or risk management as conditions evolve
Capacity Market Update
- The 2026/2027 PJM Capacity Auction results were released in late July, with prices rising to $329.17/MW-day, slightly above the expected collar max due to a last-minute adjustment.