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
xtreme heat across major population centers like Chicago, Philadelphia, and New York City has pushed natural gas pricing higher, with the prompt month rising nearly 30 cents over the last two weeks to around $3.15.
At the same time, natural gas is trading at its lowest level in the last two years through November 2027 and is at or below the average price over the next three years, except for winter 2028/29. For businesses on an NYMEX+ strategy, this may be a timely opportunity to lock in the remainder of a gas term while forward pricing remains favorable.
LNG exports have eased to 16.6 Bcf/d, the lowest level in months, but the decline appears tied more to seasonal maintenance than weaker demand. Golden Pass LNG in Sabine Pass, Texas, is emerging as a major new export facility and could add up to 2.7 Bcf/d of export capacity 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.
What Should You Do?
A managed index electricity agreement gives you the flexibility to lock in pieces of your rate over time rather than fixing everything at once. That means you can secure components like capacity or line losses when market conditions make sense, while keeping the rest of your supply open for future decisions.
Because energy is not purchased on the day you sign the agreement, a longer contract term can give you more time to watch the market and make more strategic hedging decisions. This structure can be especially useful for organizations that want flexibility without giving up the option to lock in when pricing becomes attractive.
If your gas agreement is based on a NYMEX+ structure, you may also request a fixed price for the remainder of the term. With gas trading at some of the lowest levels in the past 24 months, now may be a good time to evaluate that option.
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 Outlook
From May 20-25, much of the East Coast and southern U.S. will see very warm to hot conditions, with highs in the 80s and 90s. Several major East Coast cities are expected to reach the 90s early in the week.
Meanwhile, a system bringing showers and strong thunderstorms will move across the Plains and Midwest before reaching the East. Cooler conditions will follow in those areas, with highs in the upper 40s to 60s, while Texas trends milder with temperatures in the 70s and 80s.
Overall, energy demand is expected to remain moderate over the next four days before easing to lighter levels afterward.
