Natural Gas Storage and Supply
What to Do Now
A managed index electricity agreement simply sets the framework for purchasing blocks of energy in the future, locking in only those parts of your rate that you decide to lock in such as capacity, line losses, etc. At any time, you can buy up blocks of energy or even lock in the entirety of the contract if the hedged rate is low enough. Look forward for opportunities such as 2029 where pricing for March through May and September through November are less than $50.00 per MWh. Look at hedging December, February, March and April. Taking 50% of those months at today’s prices is a pretty solid bet. Hold off on January. We are projected to have a strong El Nino this winter and that should bring pricing down.
When you look at your energy strategy, don’t just look at the price you are paying or the strategy you are using. Those are important, but just as important are the measures you take to reduce the amount of energy you use in the first place. You can find the best electricity rate available, but an inefficient HVAC or old lighting will more than wipe out any savings you might achieve by increasing the amount of electricity you use. The old saying “The cheapest electricity you have is the electricity you don’t use”, still holds true. Talk to an energy expert about getting a free site audit done at your facility.
With Gas pricing so low across the board, the best play may be to lock in gas agreements for the longest term possible as it does not appear that gas pricing will drop to the current pricing for the foreseeable future.
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.
- The pricing for the 12-month strip and for 2027 continue to cycle lower with pricing hovering right around $3.00.
- While this winter is seeing lower pricing, 2028, 2029 and 2030 are all trending higher. This should prompt buyers to lock in now for as long as possible.
Watching shifts in this strip helps gauge the broader direction of gas markets, beyond just the prompt month.
Natural Gas Production: Lower 48 States
Production Snapshot
The pricing for the 12-month strip and for 2027 continue to cycle lower with pricing hovering right around $3.00. While this winter is seeing lower pricing, 2028, 2029 and 2030 are all trending higher. This should prompt buyers to lock in now for as long as possible.
- Production continues to increase as we reached a near record natural gas production of 109.9 Bcf/d last week with a couple of those days surpassing 110 Bcf.
- Increased production has been a main driver in keeping Natural Gas prices below $3.00 in the prompt month.
Weather Outlook
7-Day Weather & Demand Outlook
Warme September weather continues with warmer than normal temps in the Pacific Northwest and Southern states remaining virtually stuck under heat domes. Forecasters are predicting that this may be the warmest September on record. The average temp has been 61.8 degrees so far this month and the record, set back in 2023, was 61.5 degrees on average.
PJM 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.):
- The abnormally warm September has resulted in higher-than-expected pricing in September, just over six cents per kWh.
- Look to 2029 for some good opportunities to hedge pricing. March – June and September – November are all trading below expected levels.
- 2026 is now looking like it average $57.12 per MWh while 2027 will be lower at $55.69. Then it jumps back up again in 2028 before dropping back down in 2029.
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.
Key NYMEX Insights
- Natural Gas continues to trade at its lowest point in the near term, all the way through February 2028.
- After early 2028, pricing continues to trade near it’s highest point compared the past 24 months. This may be on the expected increase in demand for natural gas due to power demand or it could be due to the scheduled opening of more LNG facilities which would decrease storage domestically while increasing exports.
Big-picture energy market takeaway
- Natural Gas continues to trade at its lowest point in the near term, all the way through April 2028, which is a broader expanse of low pricing than just two weeks ago.
- After early 2028, pricing continues to trade near it’s highest point compared the past 24 months. This may be on the expected increase in demand for natural gas due to power demand or it could be due to the scheduled opening of more LNG facilities which would decrease storage domestically while increasing exports.
- This will also be due to the expected demand for Natural Gas coming from the electricity demand created by AI data centers. Remember, the PJM electric grid relies on Natural Gas power plants to generate 40% of their electricity.
Ampica Advise: The Demand-Side Advantage
Energy procurement matters—but reducing consumption is just as important. Even the best electricity rate can be outweighed by unnecessary energy use from inefficient HVAC equipment, aging lighting, or other avoidable facility loads.
