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NOTE: We will not be sending the eMarket Update the week of January 19 due to the federal holiday. We will return the week of January 26.

Weekly Energy Industry Summary

Commodity Fundamentals

Week of January 12, 2026

By The Numbers:

  • Prompt month (Feb 2026) natural gas settled at $3.41/MMbtu, up $.24 on Monday, January 12.
  • Prompt month crude oil settled at $59.50/bbl, up $.38 on Monday, January 12.

Natural Gas Fundamentals - Neutral/Bullish

  • The first half of January is coming in warm below the Mason-Dixon line and colder in the northern tier. 
  • Several cold fronts will move across the Midwest and East this week and through most of next week. 
  • Year-to-date natural gas production averaged 109.7 Bcf per day versus 102.8 Bcf per day for the same period last year, an increase of 6.9 Bcf per day.
  • Year-to-date gas demand for power generation averaged 32.2 Bcf per day versus 37.3 Bcf per day for the same period last year reflecting a warmer start to January 2026 than last year.
  • Year-to-date demand for gas for residential and commercial customers averaged 38 Bcf per day versus 49.5 Bcf per day for the same period last year, a demand loss of 11.5 Bcf per day reflecting the first half of January 2026 being warmer on a population weighted heating-degree-day basis than last year.
  • LNG exports month-to-date averaged 18.7 Bcf per day versus 15.0 Bcf per day for the same period last year.
  • Export of gas to Mexico month-to-date averaged 5.0 Bcf per day versus 6.1 Bcf per day for the same period last year.
  • This year versus the same period last year, production of natural gas is up 6.9 Bcf per day while demand is off 18.2 Bcf per day; This gap in the supply/demand balance has moved pricing to the downside to open the year.
  • The weather will be the primary driver of natural gas over the next several weeks.  

Crude Oil - Neutral

  • Oil prices climbed and settled at $59.50/bbl, plus $0.38.  Oil prices climbed over the past few days on worries that Iran's exports could decline as the sanctioned OPEC member cracks down on anti-government demonstrations.  Upside pricing action is held in check as OPEC has 5.3 million barrels per day of spare production capacity on hand.  Additionally, there is confidence that Venezuelan output will continue at present levels (approx. 800K bbls/day).  Iran's production is more than four times that of Venezuela's and a major disruption to that supply would be bullish of crude despite OPEC spare capacity.

Economy - Neutral

  • The Pace of inflation held steady in December; Consumer prices were up 2.7% on the year.
  • Groceries and restaurant meals had large price increases over the month of December while gasoline and used car prices declined.
  • December core consumer prices showed a seasonally adjusted 0.2% gain for December and a 2.6% gain on an annualized basis, slightly below expectations.
  • U.S. payrolls rose 50,000 in December, less than expected; unemployment rate falls to 4.4%.
  • The Supreme Court did not rule Friday on the legality of broad tariffs imposed by President Trump, leaving markets still awaiting a dedcision poised to have far reaching impacts on trade policy and the U.S. fiscal situation.
  • It is unclear when the tariff ruling will be released.  The court will release its next rulings on Wednesday.

Weather - Neutral/Bullish

  • A series of cold fronts this week will move into the midwest and east.  A break in the colder air is expected heading into next weekend.  The models diverge in the 11-15 day period with the European model moving much colder while the American model forecasts a warm up.

Weekly Natural Gas Report:

 
  • Inventories of natural gas in underground storage for the week ending January 2 are 3,256 Bcf; a withdrawal of 119 Bcf was reported for the week ending January 2.
  • Gas inventories are 31 Bcf above the five-year average and 123 Bcf less than the same time last year. 
Values reflect week ending Jan. 9, 2026
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Prices reflect week ending Jan. 9, 2026

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices continued to fall last week as milder temperature outlooks and declining natural gas prices provided bearish near-term momentum despite record high LNG send-outs.  That all might reverse course a bit this week, as weather forecasts turned colder in the 11-15 day outlook.  NYMEX futures surged over 7% on Monday for the February contract, on heightened heating demand in the coming weeks.  Ridging upstream is leading to a deeper trough in the eastern United States. This will allow cold fronts to draw down cold air from Canada, resulting in a couple of rounds of much below normal temperatures. The first round occurs later this week, with another at the beginning of next week.  Forward power prices for the 2026-2030 terms, last week, were -3% lower with a -6% decrease on the front of the price curve and only a -1% drop on the back for 2028-2030.  The month-to-date, day-ahead settlement price average in West Hub for January is $38.19/MWh, which is -44% lower than the prior month of December’s final settlement price.
  • PJM Conducts Workshop on Compliance with FERC Show Cause Order - On 01/09, PJM held its first workshop in response to the 12/18 show cause order on co-located load.  PJM provided a high-level overview of the order’s findings and outlined the compliance elements PJM plans to address in its 1/20 filing.  That filing will focus on updates to PJM’s interconnection procedures, including clarifications on how project developers with co-located load can use provisional interconnection service, how resources may obtain service below nameplate capacity to serve co-located load, whether any aspects of the interconnection process can be accelerated for these projects, and how surplus interconnection service may be used to support generation serving co-located load. PJM also plans to include the definition of “co-located load” adopted by FERC.  Additional workshops are scheduled for 01/23, 01/26, and 02/05, each focusing on other compliance topics in FERC’s order: behind the meter generation (01/23), interconnection study procedures (01/26), and new transmission service products (including rates, terms, and conditions) (02/05), with details to be provided in the related meeting notices.  PJM acknowledged that it also must file on 1/20 an informational report on the status of the Critical Issues Fast Path (CIFP) proceeding on large load.

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices continued to fall last week as milder temperature outlooks and declining natural gas prices provided bearish near-term momentum despite record high LNG send-outs.  That all might reverse course a bit this week, as weather forecasts turned colder in the 11-15 day outlook.  NYMEX futures surged over 7% on Monday for the February contract, on heightened heating demand in the coming weeks.  Ridging upstream is leading to a deeper trough in the eastern United States. This will allow cold fronts to draw down cold air from Canada, resulting in a couple of rounds of much below normal temperatures. The first round occurs later this week, with another at the beginning of next week.  Forward power prices for the 2026-2030 terms were -5% lower last week, with a -8% decrease on the front of the price curve for 2026, and a -4% drop on the back for the 2028-2030 terms.  The month-to-date, day-ahead settlement price average in COMED for January is $28.85/MWh, which is -29% lower than the prior month of December’s final settlement price, while that current average for AdHub is $32.48/MWh for the month, which is -34% lower than last month.  In Michigan the monthly average price, thus far, for January is $36.30/MWh which is -27% lower than last month’s average, while that price in Ameren is currently averaging $31.52/MWh, or -28% lower than the December final settlement price.
  • PJM Conducts Workshop on Compliance with FERC Show Cause Order - On 01/09, PJM held its first workshop in response to the 12/18 show cause order on co-located load.  PJM provided a high-level overview of the order’s findings and outlined the compliance elements PJM plans to address in its 1/20 filing.  That filing will focus on updates to PJM’s interconnection procedures, including clarifications on how project developers with co-located load can use provisional interconnection service, how resources may obtain service below nameplate capacity to serve co-located load, whether any aspects of the interconnection process can be accelerated for these projects, and how surplus interconnection service may be used to support generation serving co-located load. PJM also plans to include the definition of “co-located load” adopted by FERC.  Additional workshops are scheduled for 01/23, 01/26, and 02/05, each focusing on other compliance topics in FERC’s order: behind the meter generation (01/23), interconnection study procedures (01/26), and new transmission service products (including rates, terms, and conditions) (02/05), with details to be provided in the related meeting notices.  PJM acknowledged that it also must file on 1/20 an informational report on the status of the Critical Issues Fast Path (CIFP) proceeding on large load.

Northeast Energy Summary

  • As we settle into the new year ISO New England has already prioritized its objectives and highlights in 2026 via its 2026 Annual Work Plan released in October. The plan is highlighted by "anchor projects" and their related core implementations. The continuation of its Capacity Auction Reform (CAR) will likely remain on center stage as the CAR-prompt/deactivation phase has been signed, sealed and delivered to FERC; while the seasonal/accreditation phase has just begun and is expected to prompt lively discussions and collaboration between stakeholders. Two transmission-related anchor projects will be the ISO's new advisory role of Asset Condition Review per the request of both state and transmission owner representatives and the implementation of  New England's (states) Long-Term Transmission Planning RFP. The project has a target date of a preferred solution by September 2026. The ISO is currently assessing the development of  dynamic operating reserves to address operational uncertainties from the region's continued growth in solar and wind resources as its 4th anchor undertaking. Stakeholder discussions are targeted to commence in Q4 of 2026. Finally, several smaller initiatives roll up to the organization's IT anchor project. Technology implementation of its real-time market clearing engine, the participation of distributed energy resource aggregations in wholesale markets, and ambient adjusted transmission line ratings round out this 5th and final anchor project. The regional transmission operator also highlighted a sundry of other notable initiatives as a well as outlining its planning and operational priorities.  
  • Offshore wind continues to face hurdles in New York. Equinor’s 810-MW Empire Wind 1 project, which is roughly 60% complete, could be cancelled as early as this month due to the Trump administration’s issuance of a lease suspension order last month. On January 2, Equinor filed a civil suit at the U.S. District Court for the District of Columbia challenging the lease suspension order, which was issued by the U.S. Interior Department last month due to “classified national security risks.”  Equinor has subsequently filed a preliminary injunction asking the court to allow work on the project to continue while the lawsuit is ongoing, to avoid losing access to a specialized heavy lift vessel necessary to complete work on the project that becomes unavailable next month due to other contractual obligations.  The project cancelation, should it occur, would be a financial loss of nearly $5.3 billion dollars, and would undermine the predictable public permitting process in which the public and private sector relies.  This is the second time the project was targeted; in April 2025, the Bureau of Ocean Energy Management issued a stop-work order which was lifted a month later.  The New York Independent System Operator has published various grid reliability studies, most recently in October, highlighting potential reliability issues for NYC should the Empire Wind project not come online as scheduled in 2027. 

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • Mother Nature is clearly not a skier. The big picture forecast is one of widespread above to much above normal temperatures across the Western U.S. this week, even stretching north of the border with temperatures running 20+ degrees above normal at times across Western Canada. This could last into next week when western ridging is then shown to become focused more around Alaska sending colder air back into Western Canada. But at the moment the colder temperatures are looking to be impactful farther north around Alberta more than the Western U.S. Very low wind will be seen for both California and the Northwest through early next week as the Santa Ana wind influence diminishes. Solar will be abundant as clear skies dominate, rewarding index power buyers with middle of the day discounts.
  • Following up on the story from last week, it’s official – California is drought free for the first time in 25 years. Correct, not a typo – years. And not only is it drought free, but it is also the only state in the union to be in such a condition. After a series of atmospheric river systems swept across the state over the holidays, federal and state data confirm that the combination of persistent rainfall and snowpack accumulation has replenished reservoirs, revived groundwater supplies, and restored stream flows to levels not seen since the late 1990s. That’s the good news, but the transition from drought to surplus is a double-edged sword. While water supplies are currently robust, experts caution that California’s history of boom-and-bust hydrology demands proactive planning. Water managers are reviewing flood control measures, updating emergency response plans, and considering new investments in storage and distribution to capture the water for people’s needs, agriculture and power generation. Additionally, healthy water years encourage healthy growth in plant life which will inevitably dry out and act as tinder for a brutal wildfire season.
  • The warmth that came along with the atmospheric rivers and the healthy renewable output thus far this year have been weighing heavily on California gas prices as power demand and power generation burns have not been able to get off the ground. The conversation that must be happening in the operations centers at PG&E and SoCalGas these days is who will consume all the gas sitting in storage. The needle on PG&E’s tanks indicate there is 168 Bcf in there which is about 17 Bcf more than this time last year; SoCalGas is showing 106 Bcf and 15 Bcf year over year. These fundamentals are pressing on city gates prices as PG&E’s has been drifting towards the $2 MMBtu mark while SoCal’s just cracked under the $3 mark after holding above it for the past two weeks. The issue facing storage operators as they make the transition to the back half of winter this week is when they will begin to pull gas from storage to clear space for the injection season.

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