LNG Feedgas Demand Rises; September Contract Stabilizes
As temperatures and cooling demand are set to rebound this week, LNG feedgas continues its upward trajectory. Plaquemines LNG reached 3.1Bcf/d on Sunday and will ramp further in the coming weeks. Despite mild weather and bearish fundamentals—weak feedgas, strong production, and a surprise EIA storage build—spot Henry Hub settled at $2.99 for the weekend. Storage surpluses could top 200Bcf above five-year averages into early August, with excess South Central salt storage ready to respond to any late-summer rally. While the tropics aren’t an immediate threat to the Gulf Coast, seasonal activity is beginning.
NYMEX NAT GAS CALENDAR STRIPS
Electricity: Capacity Auction Results
- 2026/2027 Capacity Auction: Results released at July’s end, clearing at $329.17/MW-day after a last-minute ‘Shapiro Collar’ adjustment (max $329.00, min $175.00 for upcoming auctions).
- Forward Guidance: Expect collar rules to continue through the subsequent three auction cycles.
Natural Gas Supply
- Consistently Strong Injections: For the second consecutive week, supply injections totaled 106.3Bcf/d. At this pace, U.S. natural gas storage is projected to surpass the five-year average in September.
- Price Update: Natural gas finished last week below $3.00 at $2.99. Winter 2025-26 strips fell by roughly ten cents, reflecting persistent positive supply.
NYMEX Natural Gas Analytics
Natural Gas: Winter 2025/2026 Natural Gas Pricing
LNG & Mexico Natural Gas Exports
Demand
- LNG Export Capacity Expanding: Over the next five years, U.S. LNG export capabilities will jump from under 17Bcf/d to 33.5Bcf/d by 2030—posing a significant draw on available supply unless production keeps pace.
- Peak Demand Alerts: Hotter weather across the Plains and Midwest could spark several Peak Demand Warning days. Consider reducing A/C or shifting process loads to off-peak hours to help mitigate potential future rate increases.
Natural Gas Production
Actionable Insights
- Procurement Strategy: Consider securing a 25–50% block for Winter 2025–26 within the next two weeks. A smaller block for July–September next summer, focusing on on-peak hours, may also be advantageous.
Market Watch
PJM electricity futures declined an average of $1.35/MWh (-2%) in July. Short-term natural gas price weakness was the primary driver, blunting realized bullish power prices. Downside concentrated in Cal 2026, while Cal 2027 edged only $0.32/MWh lower. Falling winter premiums have also eased PJM pricing slightly.
6–10 Day & 8–14 Day Temp Outlook
