Energy Market Snapshot Jan. 21, 2025

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Energy Market Snapshot Jan. 21, 2025

Natural Gas: Storage and Supply

As of January 9, working natural gas in storage stood at 3,185 Bcf, a 71 Bcf withdrawal from the prior week, according to EIA estimates.

Current levels are 33 Bcf higher year-over-year and 106 Bcf above the five-year average of 3,079 Bcf, keeping inventories within the typical seasonal range.

Production continues to ease slightly into the new year, averaging 106.9 Bcf/d, about 2 Bcf/d below December highs. Day-over-day production slipped 0.2 Bcf/d, week-over-week 1.7 Bcf/d, and month-over-month 3.2 Bcf/d, though output remains nearly 5 Bcf/d higher than last year.

LNG exports remain strong, with all major facilities operating at or near maximum capacity. Feedgas deliveries are holding steady at 19.0 Bcf/d.

Market Movement

The recent EIA storage withdrawal came in lighter than expected—71 Bcf versus market expectations of 91 Bcf, a five-year average draw of 146 Bcf, and last year’s significant 227 Bcf withdrawal.

Natural gas futures extended their recent pullback last week, with the prompt month declining $0.31 to settle at $3.10/MMBtu, while the 12-month strip eased to $3.32/MMBtu. Longer-term contracts (Cals ’27–’30) held steady with minimal movement, though Cals ’31 and beyond posted notable gains.

weekend. Colder forecasts sparked a sharp 25% rebound in prompt-month pricing as of January 20.

Weather Outlook and Demand

Frigid air is spreading across the Midwest and East, with highs in the 10s–40s and lows in the single digits to 30s—conditions expected to elevate national demand.

A stronger Arctic blast late this week through early next week will grip much of the northern U.S., driving temperatures into the 0s–30s as far south as North Texas, the Gulf Coast, and the Southeast, while the West remains mild.

Energy demand forecast:

High today
Moderate Wednesday–Thursday
Very High Friday through Monday

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.

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.

Power Market Recap

Monday, Jan. 19: Front-of-the-curve prices surged as weekend forecasts raised demand expectations across the PJM and neighboring regions. Single-digit lows are expected this weekend into next week, pushing near-term power prices higher.
Friday, Jan. 16: Cooler adjustments in the 11–15-day forecast lifted near-term prices, though longer-dated positions held steady. The March–December strip rose $1.39 on-peak amid limited trading activity.

(PJM) AD HUB DA & FWD TREND ANALYSIS

NYMEX PRICE TREND ANALYSIS – NEXT 24 MONTHS

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