Natural Gas Storage and Supply
- Pricing overall has risen in the past week with the yearly average DA/ATC price now topping $60.00 in 2027 and 2028. 2026 is just a shade lower at $59.48 but will likely top $60.00 for the average in the coming weeks.
- Natural Gas prices spiked almost 40 cents last week, after a major Columbia Gas Pipeline in West Virginia, the Mountaineer Xpress pipeline, had to shut down due to mechanical issues. Prices began retreating once repairs werecompleted
- This was the sixth straight week of injections below the five-year average. Injections have been lower than expected due to the hotter temperatures across the US resulting in more cooling demand.
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. Pricing for 2029, which had been very advantageous just a few weeks ago, has begun to rise, but there are still opportunities. Look at hedging 25-50% March through June of 2029. We have seen heat waves in June in recent years and pricing in June right now is still low enough to act as insurance against a June Heat Wave.
For clients using less than a million kWh a year, a solid option may be to pass through the cost of capacity. This means that your capacity costs each month may have slight variations, but it eliminates any premium that suppliers may put on the capacity component of your rate and if you make any efficiency improvements at your facility such as converting to LED lighting, more efficient machines, more efficient HVAC, etc. you will see the benefits of those efficiency upgrades in your capacity costs. Talk to an energy expert about getting a free site audit done at your facility to explore efficiency measures that can be taken..
A longer term may not be a bad thing. Many suppliers are now pricing 60 and 48-month terms lower than 36 or 24-month terms.
With Gas pricing so low across the board, the best play may be to lock in gas agreements for the longest term possible as with Natural Gas trading at or below $3.00, most of the risk is upside risk. There is a far greater chance the price will go up rather than down much further.
NYMEX Natural Gas Calendar Strips
- Despite a sharp increase last week and a near record cold February, pricing for 2026 has averaged just $3.63 for the year.
- Winter pricing for December through March remains historically low with January the highest month trading at $3.729 and March trading at just $2.733.
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 dropped by almost three Bcf/d last week to 109.4.
- Increased production has been a main driver in keeping Natural Gas prices lower. NYMEX Settlement prices have hovered between $2.55 and $3.23 since February’s yearly high of $7.46.
- Natural Gas drillers are now producing more with less investment as production c0ntinues to grow while CAPEX investment in drilling and exploration fell 49% in the last year
Weather Outlook
7-Day Weather & Demand Outlook
Extreme heat in the West and Southwest and cooler temps in the East are the result of a blocking ridge of high pressure that runs up from the Gulf and into Minnesota and Southern Ontario. This ridge allows warmer temps to come up from the South and cooler temps to come down from Canada in the East. The Southeast is subject to tropical systems that increase temps and humidity.
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.):
- Electricity pricing has fallen in the last week as cooler temps in the East have brought about less electricity demand for September. Pricing this month is now averaging $62.94, down from almost $70.00 last week. However
- Look to 2029 for some good opportunities to hedge pricing. March – June and September – November are all trading below expected levels, though these are starting to climb back into the normal range.
- Pricing overall has risen in the past week with the yearly average DA/ATC price now topping $60.00 in 2027 and 2028. 2026 is just a shade lower at $59.48 but will likely top $60.00 for the average in the coming weeks.
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
- While Natural Gas has seen an uptick in the last week that is already retreating, this winter is trading at almost it’s lowest point in the last two years and 2027 is still trading near two-year lows.
- After early 2028, pricing continues to trade near its 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 the Port Arthur LNG facility in Texas opening Phase 1 with Phase 2 Opening in early 2028.
- AI data centers will continue to drive extra demand for the foreseeable future. A number of legislative bills are under consideration to limit these data centers impact on the local grid, but there is no consensus on whether these bills will have any impact.
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.
