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Energy Market Snapshot Jan. 28, 2025

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Weather

Despite a slight overnight reduction in heating demand estimates, overall demand remains robust across the eastern U.S.
 
Cold temperatures dominate much of the country, with brief moderation expected midweek in the South before the next strong system arrives. Winter Storm Fern is forecast to track along the East Coast this weekend, raising the possibility of a snow event along the I-95 corridor. Another surge of Arctic air will follow, with limited signs of lasting moderation into next week.
 
16–30 Day Outlook:
  • European models: Support a reloading cold pattern across the East for February.
  • American models: Suggest a milder start to February before cold conditions return, though with less intensity than before.
weather - outlook

Weather Outlook

Bitter cold continues across the Midwest, Plains, and East, with lows ranging from the -20s to the 20s and daytime highs from the single digits to the 30s. Even Texas and the South will see lows in the teens and 20s over the next few days. Another Arctic blast expected later this week will reinforce frigid conditions.
Meanwhile, the West remains relatively mild, with highs in the 40s and 50s. National energy demand is projected to remain very high over the next 7 days.

EIA Natural Gas Storage Update

As of Friday, January 16, 2026, working gas in storage totaled 3,065 Bcf, down 120 Bcf from the previous week. Storage levels sit 141 Bcf above last year and 177 Bcf above the five-year average (2,888 Bcf), marking a substantial buffer entering late winter.
 
Last week’s frigid weather fueled a dramatic price surge — the NYMEX prompt month climbed $2.17 before settling at $5.28/MMBtu on Friday. Market volatility remains elevated, with February 2026 contracts already trading above $6.50/MMBtu early Monday.

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 Fundamentals

February Nymex futures climbed to $6.80/MMBtu, gaining $1.53 on Monday as Winter Storm Fern tightened supply dynamics. Freeze-offs are curbing production, and substantial storage withdrawals are expected to follow.
  • Projected storage draws: 250 Bcf this week, at least 350 Bcf next week.
  • Storage outlook: Inventories shifting from bearish to bullish through the remainder of winter
  • Freeze-off impact: Peaking today (Jan. 27), at 15–16 Bcf, then trending toward normal over the next 10 days

  • Henry Hub NYMEX Cal 27–31 strips:
    • 2027: $3.81 (+0.02)
    • 2028: $3.61 (–0.03)
    • 2029: $3.60 (–0.01)
    • 2030: $3.64 (+0.00)
    • 2031: $3.62 (0.00)

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.
PJM capacity auction results
Natural Gas Production

Natural Gas Production

  • Current output: 97.6 Bcf/d
    • Day-over-day: –0.1 Bcf/d
    • Week-over-week: –9.5 Bcf/d
    • Month-over-month: –12.0 Bcf/d
    • 30-day average: 108.1 Bcf/d
    • Year-over-year: +4.9 Bcf/d
Production losses from freeze-offs have contributed to rising price pressure, with recovery expected as temperatures moderate into early February.

NYMEX PRICE TREND ANALYSIS

natural gas chart Oct 2025
NYMEX Natural gas

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.

natural gas chart Oct 2025

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