Market Signals: Energy Pricing
Supply-side fundamentals were largely unchanged from last week. Natural gas production held steady at 108.5 Bcf, while LNG exports remained at 17.1 Bcf/d, also unchanged from the prior week.
Following the record heat wave in the first half of July, the Day Ahead Index on the ADHUB settled at $72.28 per MWh. While that is well below the start of the month, when pricing was above $120.00, it still marks the second-highest level of the year. August has started at a much lower level, with pricing currently at $39.64.
Natural gas prices continue to remain exceptionally low. Maintenance at LNG export facilities has kept exports near 17 Bcf/d, leaving more supply in domestic storage and putting downward pressure on prices.
Natural Gas Storage and Supply
Weekly 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.
LNG Exports
Both NYMEX forward strips and LNG export levels remain near recent averages, suggesting a largely balanced market for now.
(Charts: NYMEX Natural Gas Calendar Strips and LNG Exports)
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.
Natural Gas Production: Lower 48 States
Weather Outlook
Weather & Natural Gas Demand Outlook
High pressure will continue to dominate the western and southern U.S. over the next several days, bringing widespread highs from the 90s to 110s. Meanwhile, weather systems moving through the Northern Rockies, Midwest, and Northeast will keep showers in the forecast through Wednesday, with highs mainly in the 70s and 80s.
From Thursday through Sunday, much of the country will turn hot to very hot, with temperatures broadly in the 90s to 110s. The Northern Plains will remain the main cooler exception, with highs mostly in the 70s to 80s.
Overall, national natural gas demand is expected to be moderate to high over the next 2 to 3 days, then increase to high to very high for the remainder of the week.
PJM Ad Hub DA & Forward Trend Analysis
JM Ad Hub DA & Forward Trend Analysis
This chart shows where current PJM AD Hub day‑ahead and forward power prices sit versus the past two years of trading, and whether today’s levels look cheap or expensive for each future period.
Big picture
- Each bar represents a 24‑month trading range for a specific month, quarter, or year in the future, with the light blue band showing the lowest and highest prices over the last 2 years.
- The dark mark inside each bar is today’s forward price, so you can instantly see if the market is currently near the top, middle, or bottom of its recent range.
What the table tells you
- The table underneath lists, for each period (Q2‑2026, Q3‑2026, 2027, 2028, 2029, 2030, etc.):
- Current price in that strip.
- The maximum and minimum prices over the last 24 months and the dates they occurred.
- The current percentile (for example, 3% means today is near the very bottom of the 2‑year range; 86% means it’s near the top).
- The actual prices at the 25th, 50th, and 75th percentiles act like “cheap / mid / rich” reference points.
How to interpret it for decisions
- Periods where the current price is low on the bar and at a low percentile suggest relatively attractive buying or hedging opportunities compared with recent history.
- Periods where the current price is high on the bar and at a high percentile indicate the market is pricing that future strip richly, so you may want to be more cautious about locking in too much volume there.
NYMEX Price Trend Analysis
This chart shows that NYMEX natural gas prices over the next several years are relatively low compared with their recent trading range, but they remain volatile and tend to spike in winter months.
What the chart is basically saying
- It is a forward curve: each bar represents what the market today thinks gas will cost in a specific future month, based on NYMEX futures trading.
- The light blue “24M trading history” band around each month shows the range in which that contract has traded over the past two years, and the black line shows today’s price within that range.
- For many future months, today’s price is near the bottom of that 2‑year range (a very low percentile in the table), indicating the market is currently pricing gas on the cheaper side compared with recent history.
Big-picture energy market takeaway
- The curve gently rises over time and bumps up in winter (late 2026, 2027, 2028), reflecting expectations of stronger heating demand in cold months and the typical seasonal risk in natural gas.
- Because today’s prices sit near recent lows for many of those future periods (single‑digit to low‑double‑digit percentiles), the market is not currently forecasting a severe supply crunch; instead, it suggests adequate supply and only moderate risk premiums built in.
- For a business buyer, the practical implication is: forward prices are historically attractive right now, especially if you want to lock in budget certainty through the next several winters rather than gamble on future spikes.
AMPICA ADVICE: WHAT SHOULD YOU DO?
A managed index electricity agreement gives you flexibility by letting you purchase blocks of energy over time and choose which parts of your rate to lock in, such as capacity and line losses. When market conditions are favorable, you can lock in a portion of your load or even hedge the full contract.
That approach creates opportunities to take advantage of lower-priced periods, including 2029, when March through May and September through November are currently priced below $50.00 per MWh.
Just as important as your purchasing strategy is your energy efficiency strategy. Even the best electricity rate can be offset by waste from inefficient HVAC systems, outdated lighting, or other equipment that drives unnecessary usage. The cheapest electricity is still the electricity you do not use.
Talk to an energy expert about scheduling a free site audit at your facility.
