Big Reasons to Buy Now
Natural Gas Supply Snapshot
- Warm weather across the US has finally reflected in storage numbers, with last week’s injection at +55 Bcf—still on the higher end of projections.
- Storage injections remain robust, indicating we may exceed last year’s near-record storage levels before winter, which could help keep prices in check.
- Supply is climbing: Last week, daily production surpassed 106 Bcf/d, pushing prices down to $3.30 per MMBtu—a drop of nearly 70 cents in just two weeks.
EIA: Natural Gas Storage Report
Natural Gas Demand Overview
- Despite the ongoing heat wave, overall demand (commercial, residential, industrial, and power) is consistent with recent years—not excessively high.
- Winter pricing is falling: The highest-priced month for next winter is now $4.68 per MMBtu, about 50 cents less than it was a few weeks ago.
- LNG export capacity is set to nearly double by 2030—from just under 17.0 Bcf/d to 33.5 Bcf/d. This will tighten available supply unless production increases.
NYMEX Natural Gas Calendar Strips
ALL ABOUT THE NYMEX TWELVE-MONTH STRIP
- The NYMEX Twelve Month Strip is the average of the upcoming 12 months of closing Henry Hub natural gas futures prices as reported on CME/NYMEX.
- A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction.
- The NYMEX Twelve Month Strip can lock in a specific price for natural gas futures for a year with 12 monthly contracts connected into a strip.
- The average price of these 12 contracts is the particular price that traders can transact at, indicating the direction of natural gas prices.
- The price of the NYMEX Twelve Month Strip can show the average cost of the next twelve months’ worth of futures.
- The NYMEX Twelve Month Strip is also used to understand the direction of natural gas prices and to lock in a specific price for natural gas futures for a year.
NYMEX Rolling Prompt Month
What Should You Do?
- Now is a good time to buy electricity and gas, especially for longer terms.
- Short contracts covering 2026 may be more expensive than blending in lower rates from 2027–2029.
- Eliminate unnecessary premiums on your rate, such as capacity charges.
- High-usage customers (over 1 million kWh/year): Consider a managed index product to buy blocks of energy during market dips or to hedge against potential price spikes.
Risk Assessment
- Remain cautious of upside price risks for 2026. Continue a portfolio approach to manage volatility and exposure.
- PJM futures may see renewed downside into late spring, but risk-averse users may want to lock in recent price declines.
- 2026 outlook: Natural gas price risks remain, driven by potential load growth and tightening reserve margins.
- Long-term uncertainty: While fundamentals seem weak, a recession or a warm winter could create more favorable procurement opportunities.
Near & Mid-Term Price Action
Market Drivers & Technicals
- Speculators are currently driving natural gas pricing more than fundamentals.
- Triple-digit storage build: A recent 104-Bcf injection (slightly above consensus) pushed June contracts down 19.6¢ intraday, cooling bullish sentiment.
- Technical indicators are still pointed higher, but a mild seasonal supply dip could offer support.
- Weather: Mild demand persists, but an increase of 19 cooling degree days (CDDs) week-over-week—especially for Week 2—is supportive. Minneapolis may hit 90°F next week, and the Mid-Atlantic/Northeast could trend warmer into mid-to-late May. However, the end of heating demand is bearish for prices.
- Spot prices: Henry Hub is at $3.23, 36¢ below the front-month contract.
- LNG maintenance: Cheniere confirms heavy maintenance for June. While market momentum is bullish, the near-to-medium-term outlook remains fundamentally soft.
Storage Plus or Minus, US
PJM AD HUB DA & FWD TREND ANALYSIS
NATURAL GAS NYMEX ANALYTICS
Weather Outlook: July 7–13
Get ready for a hot week across most of the United States!
- Cooler spots: Areas near the Canadian border will be a bit milder, with temperatures in the 70s.
- Widespread warmth: Expect daytime highs in the mid-80s to 90s for much of the country.
- Extreme heat: The West will see the hottest conditions, with some locations reaching the 100s.
- Energy impact: With these temperatures, energy demand will remain high throughout the next 7 days.
Stay cool, and consider adjusting your energy use during peak afternoon hours to help manage demand.
6–10 & 8–14 Day Temperature Forecasts
Natural Gas Production
