Energy Market Update: Sept. 17, 2025
Market Highlights
Natural gas futures opened the week stronger, rising by $0.102/MMBtu following weather model updates that extended above-normal temperatures into late September. Despite this move in natural gas, power prices saw only a slight increase due to very low trading volume.
NATURAL GAS PRODUCTION CHART
Commodity by the Numbers
- Natural Gas Prompt-Month (NG ‘25): $3.04/MMBtu (up $0.10/MMBtu on September 15)
- One week ago: $3.09/MMBtu
- Crude Oil Prompt-Month: $63.30/bbl (up $0.61/bbl on September 15)
- One week ago: $62.26/bbl
NYMEX Forward Calendar Strips
💡 Did You Know?
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.
Natural Gas Fundamentals
- Production remains strong:
- Sept. month-to-date: 106.7 Bcf/d vs. 100.8 Bcf/d last year
- Year-to-date: 105.3 Bcf/d vs. 101.6 Bcf/d last year
- Power demand easing:
- Month-to-date: 39.9 Bcf/d vs. 41.1 Bcf/d last year
- Residential & commercial demand steady:
- 22.1 Bcf/d (virtually flat YoY)
- LNG exports higher:
- YTD average: 15.3 Bcf/d vs. 12.8 Bcf/d last year
- Exports to Mexico: Flat year-over-year
- Storage outlook: Well-positioned, with inventories expected to approach 4 Tcf for winter.
Energy Buying Strategy
Buying small blocks of energy for winter 2025 (and possibly a small summer block, around 25% of needs) can be good insurance at current pricing levels. Contracts covering only 2026 will be higher than multi-year contracts that blend lower pricing from 2027-2029. For high-usage clients (over one million kWh/year), consider a managed index product to capture market dips and avoid premium charges on elements like capacity—especially while market signals remain favorable.
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.
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.
Key Market Impacts to Renewables
Policy shifts are adding uncertainty for wind and solar developers:
- Removal of 5% CapEx safe harbor for tax credits
- New Section 232 tariff investigation on wind turbine imports
- Stricter Department of the Interior oversight on projects
Together, these changes increase costs, prolong project timelines, and introduce new risk factors for renewable energy development across the US.
Weather Outlook
- High pressure dominates most of the US with widespread 80s–90s and 100s in the Southwest.
- Cooler pockets include the Rockies, Northern Plains, and Northeast with highs in the upper 60s–80s.
- Forecast:
- Moderate national demand during the current workweek
- Low demand heading into the weekend as seasonal cooling expands
EIA: STORAGE REPORT
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.
EIA Natural Gas Storage
- Working gas in storage: 3,343 Bcf (as of September 5, 2025)
- Weekly net injection: +71 Bcf
- Stocks compared to 2024: 38 Bcf lower
- Stocks compared to 5-year average: 188 Bcf higher (5-year average: 3,155 Bcf)
- Total inventories remain within the five-year historical range and continue trending toward ~4 Tcf by late October.