Energy Market Overview:
Commodity Pricing:
- Prompt Month (Feb 2026) Nat Gas: $3.41/MMBtu (↑ $0.24 on Monday)
- Prompt Month Crude Oil: $59.50/bbl (↑ $0.38 on Monday)
EIA:Short Term Energy Outlook
According to the EIA’s January Short-Term Energy Outlook, Henry Hub natural gas spot prices are expected to:
- Decline ~2% in 2026 to just under $3.50/MMBtu
- Rise ~33% in 2027 to nearly $4.60/MMBtu
Supply growth is expected to keep pace with demand through 2026, but expanding LNG export capacity in 2027 could tighten balances and lift prices.
Weather Outlook
Mild weather will dominate much of the U.S. through midweek, with daytime highs ranging from the 40s to 70s across most regions. The far northern states will stay on the chilly side, seeing highs only in the 10s to 30s.
By late week and into the weekend, a surge of Arctic air will push into the northern half of the country, bringing a much colder pattern. Expect highs in the 0s to 40s and overnight lows dipping into the -0s and 30s. This shift will drive stronger national heating demand heading into the second half of the week.
Energy Demand Outlook:
- Wednesday: Very light demand
- Thursday–Sunday: Stronger demand as the cold expands south
Capacity Market Notes
The Base Residual Auction for the 2027/2028 delivery year (June–May) cleared slightly higher at $333.44 per MW-Day. However, for the first time, the auction fell short of securing enough capacity to meet projected demand by more than 6,000 MW.
This shortfall raises reliability concerns looking ahead, including the potential for rolling brownouts or blackouts if capacity doesn’t improve. PJM could even hold a supplemental capacity auction, similar to what occurred in 2015/2016.
Natural Gas Fundamentals
Production: Currently at 107.7 Bcf/d
- Day-over-day: +0.1 Bcf/d
- Week-over-week: +0.3 Bcf/d
- Month-over-month: +0.1 Bcf/d
- 30-day average: 107.8 Bcf/d
- Year-over-year: +3.5 Bcf/d
NYMEX PRICE TREND ANALYSIS
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.
Market Summary:
The first half of January remains mild below the Mason-Dixon line but colder across the northern tier. Multiple fronts will sweep through the Midwest and East this week, extending cold conditions into next week.
Year-to-date natural gas production has averaged 109.7 Bcf/d, up 6.9 Bcf/d from the same period last year. However, overall demand is trending lower than in January 2025:
- Power generation demand: 32.2 Bcf/d (↓ 5.1 Bcf/d YoY)
- Residential & commercial demand: 38.0 Bcf/d (↓ 11.5 Bcf/d YoY)
- LNG exports: 18.7 Bcf/d (↑ 3.7 Bcf/d YoY)
- Exports to Mexico: 5.0 Bcf/d (↓ 1.1 Bcf/d YoY)
The combined effect — stronger supply but softer demand — has applied downward pressure on early-year pricing. In the short term, weather remains the dominant factor driving the direction of the natural gas market.
(PJM) AD HUB DA & FWD TREND ANALYSIS
NYMEX PRICE TREND ANALYSIS – NEXT 24 MONTHS
Weekly Storage Report
Working gas in storage for the week ending January 2 totaled 3,256 Bcf, following a 119 Bcf withdrawal.
- 31 Bcf above the five-year average
- 123 Bcf below levels from the same week last year
Natural Gas Deamnd Exports
Mid-Atlantic Power Market Summary
Forward power prices in the Mid-Atlantic region continued to drift lower last week amid mild weather forecasts and soft natural gas prices. However, that trend may reverse as updated 11–15 day outlooks turn colder.
- NYMEX February natural gas futures surged 7% on Monday, supported by expectations for increased heating demand.
- Atmospheric ridging in the West is deepening the eastern trough, allowing multiple rounds of below-normal temperatures to sweep across the region.
Forward Power Prices:
- 2026–2030 terms down 3% overall last week
- Front of curve (2026–2027): -6%
- Back of curve (2028–2030): -1%
- West Hub January MTD avg: $38.19/MWh, 44% lower than December’s final price
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