Market Signals: Pricing, Strategy and Trends
PRICING
- PJM’s 2028/2029 Capacity Auction results were released July 14, clearing at the price cap of $325.00 per MW-day, slightly below last year’s $333.44 cap. The auction again fell short of reliability requirements, missing by roughly 6.8–7 GW for the third straight year and highlighting how tight supply has become.
PJM may need to run additional auctions or take corrective actions as we get closer to the delivery years to ensure enough committed capacity.
- With the August settlement price due Tuesday, many market participants have been unwinding positions, triggering a late-month selloff. On Tuesday the 28th, the prompt month opened around $2.76 and dropped roughly 11 cents by the end of the trading day.
- The early July heat dome over PJM pushed load toward record territory and helped drive July wholesale pricing above $120 per MWh in many hours, with four‑digit spikes in some markets. Persistently hot weather and another heat wave moving across the country are keeping summer power prices elevated.
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 (July 28 – August 2)
A broad stretch of very warm to hot weather will dominate most of the U.S. through early August, with daytime highs generally in the upper 80s to 100s—and locally reaching the 110s in parts of Texas and the Plains.
Portions of the Midwest, Great Lakes, and Northeast will see some relief as weak systems move through, bringing scattered showers, thunderstorms, and more moderate highs in the 70s to 80s.
Taken together, elevated temperatures across key load centers are expected to support strong national natural gas demand over the next seven days, particularly for power generation.
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 sets a flexible framework for buying energy over time, rather than locking everything in on day one. You can choose which components to fix—such as capacity, transmission, and line losses—and which to leave indexed to the market. As conditions change, you can layer in blocks of energy or fully hedge the remainder of the contract when forward prices are attractive.
Right now, forward curves show opportunities in the 2029 delivery year, with shoulder-month pricing (March–May and September–November) under $50.00 per MWh in some markets. Watching these windows and acting quickly can materially lower your blended cost of power.
When you review your energy strategy, don’t focus only on rate and procurement structure. Those matter—but usage is equally critical. You can negotiate an excellent electricity rate, yet inefficient HVAC systems or outdated lighting can erase those savings by driving up consumption. The adage still applies: “The cheapest electricity you have is the electricity you don’t use.” Pair your supply strategy with efficiency measures, and talk to an energy expert about scheduling a free site audit to identify low‑cost upgrades at your facility.
