Energy Market Overview
This week’s energy markets reflect relative stability in both natural gas and electricity, alongside moderate demand expectations amid mixed weather.
Natural Gas
Natural gas prices continue to hover in the low $3.00 range, with forward pricing for next winter remaining favorable, supported by expectations of an El Niño weather pattern. Supply remains strong, with production exceeding 108 Bcf/d, while LNG exports have rebounded above 18 Bcf/d—highlighting steady global demand.
Natural gas prices continue to hover in the low $3.00 range, with forward pricing for next winter remaining favorable, supported by expectations of an El Niño weather pattern. Supply remains strong, with production exceeding 108 Bcf/d, while LNG exports have rebounded above 18 Bcf/d—highlighting steady global demand.
Electricity
Electricity pricing is beginning to ease, with May index pricing averaging below $0.04 per kWh. Longer-term pricing signals are also encouraging—2029 rates (excluding peak summer and winter months) are trending lower than the next two years. This may present an opportunity to evaluate small hedging strategies for higher-risk months.
Electricity pricing is beginning to ease, with May index pricing averaging below $0.04 per kWh. Longer-term pricing signals are also encouraging—2029 rates (excluding peak summer and winter months) are trending lower than the next two years. This may present an opportunity to evaluate small hedging strategies for higher-risk months.
Market Dynamics
Spring maintenance season has concluded as summer demand begins to build. Strong international demand continues to support U.S. exports, which reached 18.3 Bcf/d last week.
Spring maintenance season has concluded as summer demand begins to build. Strong international demand continues to support U.S. exports, which reached 18.3 Bcf/d last week.
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.
Natural Gas Pricing Snapshot
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.
What Should You Do?
A managed index electricity agreement provides flexibility by allowing you to lock in portions of your rate—such as capacity or losses—over time rather than all at once. Because energy is not purchased upfront, longer-term agreements can offer greater opportunity to monitor the market and make informed hedging decisions.
For natural gas customers on NYMEX-plus agreements, current market conditions may offer a strategic opportunity. With gas prices expected to remain relatively low over the next 24 months, it may be worth exploring fixed-price options for the remainder of your contract.
Natural Gas Production: Lower 48 States
Weather Outlook
Weather Outlook & Demand
Weather systems will move across the eastern two-thirds of the U.S. through June 22, bringing periods of showers and cooler highs in the 60s–70s, along with intermittent warm-ups into the 80s–90s. The West will remain consistently warm to hot, with temperatures ranging from the 80s to the low 100s. Overall, natural gas demand is expected to remain low to moderate in the week ahead.
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.
