Weekly Market Update
Natural gas and power markets currently offer a near-term opportunity, but seasonal caution is warranted. With pricing favorable and weather-driven demand soft in most regions, now is a good time to evaluate hedging options before summer market pressure intensifies.
Natural gas pricing remains favorable, with prompt-month prices hovering near $2.70 and May settling at $2.559, the lowest settlement since November 2024. Forward gas pricing through November 2027 is also trading at its lowest point in the past 24 months, creating an opening for customers with NYMEX-plus contracts expiring in the next 18 months to evaluate fixed-price options for the balance of their term.Natural Gas Production
Production Snapshot
Recent market reporting shows Lower 48 dry gas production hovering near 107 Bcf/d, with production trends easing modestly from recent highs. That softer production backdrop is worth watching as the market balances weather-driven demand, storage injections, and LNG feedgas volumes heading into early May.
Pricing
Gas pricing has moved up slightly as warmer weather begins to support additional cooling demand over the next two weeks, particularly across the Southeast.
At the same time, natural gas for the next 18 months through November 2027 is trading at its lowest level in the past 24 months. If you have a NYMEX-plus contract expiring within this window, now is a good time to explore a fixed-price option for the remainder of your agreement. This could help you secure current low rates and reduce price uncertainty.
LNG exports have eased in recent weeks, largely due to seasonal maintenance rather than weaker global demand. Meanwhile, the new Golden Pass LNG facility in Sabine Pass, Texas, is becoming an important market factor, with export capacity expected to reach 2.7 Bcf per day upon full operation.
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.
Strategy: What this Means
What this Means
For electricity customers, consider a managed index agreement to create flexibility instead of locking in all energy costs immediately. This agreement lets you secure components such as capacity or line losses, while preserving the ability to purchase future energy at potentially better rates as market conditions improve.
Because energy is not fully purchased at signing, a longer contract term allows you more time to monitor the market and make informed hedging decisions. This strategy is especially worth considering for organizations using more than 1,500,000 kWh annually, particularly over the next two weeks before summer pricing pressure escalates.
For natural gas customers on a NYMEX-plus structure, now may also be an appropriate time to review whether a fixed price is available for the remainder of the contract. With forward gas pricing across the next 24 months sitting at a low point, fixing a portion or all of that exposure could reduce future risk.
PJM Ad Hub DA & Forward Trend Analysis
Electricity Market Trends
(PJM) Ad Hub day-ahead prices remain under 5¢/kWh through the next three months, with next winter’s pricing also looking more favorable than last year’s.
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.
Weather Outlook
Weather and Demand
Cooler-than-normal weather will settle across the Great Lakes, Ohio Valley, and Northeast this weekend. Daytime highs are expected to range from the 50s to the low 70s, with overnight lows in the upper 30s and 40s.
Much of the rest of the country will remain mild to warm, with highs in the 60s to 80s. The hottest conditions will continue across California, the Southwest deserts, and West Texas, where temperatures are expected to climb into the 90s and low 100s.
Overall, natural gas demand remains soft. Light to moderate demand is expected in the coming days, followed by even lighter demand as mild conditions persist in most regions.
