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NOTE: We will not be sending the Energy Market Update the week of September 1 due to the holiday. We will return to our send schedule the week of September 8.

Weekly Energy Industry Summary

Commodity Fundamentals

Week of August 25, 2025

By The Numbers:

  • NG '25 prompt-month NYMEX natural gas settled at $2.69/MMbtu, unchanged on Monday, August 25.
  • One week ago, natural gas settled at $2.89/MMbtu.
  • Prompt-month NYMEX crude oil settled at $64.80/bbl., up $1.14/bbl.
  • One week ago, crude oil settled at $63.42/bbl.

Natural Gas Fundamentals - Bearish

  • Fall has arrived early in the Midwest. Overnight lows this week will touch the lower 50s.
  • The fall-like weather is moving east with below to wee-below temperatures.
  • Power generation demand is ebbing in the teeth of cool weather.  On August 20, power demand for natural gas was 48 Bcf, and today it is 41 Bcf.
  • Production of gas continues on an upward trajectory.  Month-to-date natural gas production averaged 107.4 Bcf per day, versus 101.9 Bcf per day for the same period last year.
  • Surging production and waning power demand are widening the supply/demand balance to the supply side as August expires.
  • The trend is decidedly bearish.  Storage injections will be strong in the coming weeks and end-of-season inventories will be very near 4 trillion cubic feet, an amount considered to be full.
  • LNG exports are up, averaging 15.8 Bcf per day, month-to-date, versus 12.9 Bcf per day for the same period last year.
  • In mid-June, the 2026-2030 five-year strip was $3.86/MMbtu. This morning the 2026-2030 strip was $3.73/MMbtu.

Crude Oil - Neutral

  • NYMEX (WTI) prompt-month-crude settled at $64.80/bbl., up $1.14.
  • The crude oil market has been range-bound for weeks.
  • The global economy is an issue as trade and geopolitical events pull in various directions, neither of which have enough gravity to direct the market up or down.
  • Threats of pending sanctions relative to Russian oil and gas are in the offing, but it's not clear exactly what and when.
  • President Trump is threatening to use a reverse leverage on the major consumers of Russian oil (India and China) relative to on-going trade discussions.
  • The question is, how many barrels of Russian oil would be taken off the market pursuant to additional direct sanctions on Russia and indirect penalties on buyers of Russian crude.

Economy - Neutral

  • U.S. Mid-Atlantic factory activity slows less sharply, The Federal Reserve Bank of Richmond reports.
  • Wall Street expects the Federal Reserve to make a cut in interest rates next month.
  • Treasury yields fell as Powell signals rate cuts soon.
  • Trump expands 50% steel and aluminum tariffs.
  • Blue collar jobs are gaining popularity as AI threatens office work.
  • The producer price index jumped 0.9% in July, the biggest monthly increase since June 2022.
  • Canada rolled back a series of retaliatory tariffs against the U.S.

Weather - Bearish

  • The outlook for the second half of August has flexed down sharply with below-to-well-below normal temperatures prevailing through the eastern half of the country and staying lower-for-longer.
  • The West will be hot.
  • The tropics are ramping up, and this is generally bearish of natural gas.

Weekly Natural Gas Report:

 
  • Inventories of natural gas in underground storage for the week ending August 15 are 3,199 Bcf; an injection of 13 Bcf was reported for the week ending August 15.
  • Gas inventories are 174 Bcf above the five-year average and 95 Bcf less than the same time last year. 
Values reflect week ending Aug. 22, 2025
Prices reflect week ending Aug. 22, 2025

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices were relatively unchanged over the past week with a little movement downward in the near-term.  Strong natural gas production along with building storage inventories have been weighing on the markets for the past month or so, but the September NYMEX natural gas futures sank to a new nine-month low on Friday as unseasonably cool weather crushed demand outlooks, overwhelming Thursday’s bullish storage report and a late week rebound in LNG exports.  A southern dip in the jet stream allows high pressure from Canada to find a new home over the Midwest with below and much below normal temperatures.  The models show a warming trend in the 11-15 day range, but this expected warmth has not shifted forward in time, so confidence in “over the horizon” warmth has been reduced.  Power futures were -1% lower for the 2026 term over the past week, while the 2027-2030 terms were unchanged.  The month-to-date, day-ahead settlement price average in West Hub is currently $38.40/MWh, which is -39% lower than last month and 9% higher than a year ago.    
  • PJM Conducts a Pre-Workshop Focusing on Large Load Additions CIFP - On 8/18, PJM held a meeting to solicit initial feedback on a proposal for managing large load additions prompted by the PJM Board of Managers initiation of the Critical Issue Fast Path (CIFP) accelerated stakeholder process to develop “reliability-focused solutions to ensure large loads can continue to be integrated rapidly and reliably, without causing resource inadequacy.”  PJM’s proposal was centered on three pillars: (1) Non-Capacity-Backed Load (NCBL) service for new large loads; (2) Priority interconnection for already-queued or brand-new generation resources that have offtake agreements with large loads; and (3) New-demand response products to better match the operating capabilities and business models of large loads.  PJM explained that NCBL service would be subject to a new category of pre-emergency curtailment, before PJM takes other actions like deployment of demand response, emergency external energy purchases, and max-gen dispatch.  New large loads would have the option of voluntarily signing up for NCBL service, which would remove the load from the RPM and excuse the load from capacity charges.  If PJM were to have a shortfall of supply relative to the Reliability Requirement in a capacity auction, and voluntary NCBL is insufficient to cure the shortfall, PJM would allocate mandatory NCBL status to new large loads in an amount sufficient to remove the shortfall, first allocating NCBL to planned large loads not yet in service and, if more is needed, to large load additions from prior years.

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were relatively unchanged over the past week with a little movement downward in the near-term.  Strong natural gas production along with building storage inventories have been weighing on the markets for the past month or so, but the September NYMEX natural gas futures sank to a new nine-month low on Friday as unseasonably cool weather crushed demand outlooks, overwhelming Thursday’s bullish storage report and a late week rebound in LNG exports.  A southern dip in the jet stream allows high pressure from Canada to find a new home over the Midwest with below and much below normal temperatures.  The models show a warming trend in the 11-15 day range, but this expected warmth has not shifted forward in time, so confidence in “over the horizon” warmth has been reduced.  Power futures were -1% lower for the 2026 term over the past week, while the 2027-2030 terms were unchanged.  The month-to-date, day-ahead settlement price average for COMED is currently $39.88/MWh or is -26% lower than July’s final average price while that current average price in AdHub is $38.87/MWh or is -29% lower than last month.  In Michigan thus far this month, that average price is $46.06/MWh or is -24% lower than last month, while Ameren’s average price is $43.13/MWh or is -24% lower than July.
  • MISO to Resettle 25/26 Capacity Auction - At its 8/20 Resource Adequacy Subcommittee meeting, MISO informed market participants that it would be re-settling the 25/26 PRA results due to an error discovered in MISO’s loss of load expectation calculation software that has been occurring since 2017.  The error overstated the planning reserve margin requirement each load serving entity had to procure, and it also affected clearing prices by shifting the newly implemented reliability-based demand curves (RBDCs).  The overall system impact in the 25/26 Planning Reserve Auction (PRA) was estimated at $280 million with the majority of that impact occurring in the summer season.  MISO was careful to emphasize that these numbers are very rough estimates that supporting information and or details on the volumes and/or price changes that produced these results.  MISO plans to provide that information either at or in advance of a workshop on 9/3 at which they will discuss the detailed mechanics of how MISO is finalizing these numbers in anticipation of the resettlement being reflected in 9/22 settlement statements.  MISO's tariff allows it to correct continuing errors going back up to one year as it deems appropriate.  MISO has chosen (per this discretion) not to rerun the 25/26 auction, which would require developing a new supply curve, and instead to adjust each market participant's settlement statement based on the change in price that corresponds to newly estimated RBDCs relative to originally offered supply.

Northeast Energy Summary

  • The Trump administration once again has targeted the offshore wind industry by halting construction on Orsted and Global Infrastructure Partners' Revolution Wind. The news came on Friday, August 22 in the form of an US Bureau of Ocean and Energy Management (BOEM) injunction as a matter of national security and to prevent “interference with reasonable uses of the exclusive economic zone, the high seas, and the territorial seas.” The 700-MW wind farm is about 80% complete with 45 out of 60 total turbines planned installed and is under contract to deliver clean power supply to both Rhode Island and the state of Connecticut. What seems like an unprecedented move halting a project already under construction with all necessary permits in hand, had also happened in April when the administration took similar actions to the 801-MW Empire Wind project which was also under construction 15-30 miles south of Long Island. Actions subsequent to the stoppage were negotiations between New York Governor Kathy Hochel and the administration which led to a sort of quid pro quo in which an agreement to resume the project was reached for a certain willingness by the state to move forward with a particular natural gas pipeline project (Constitution Pipeline). There has been no word yet on the administration's intent, if any, following this most recent stop-order only that the Revolution Wind team is complying with the order and taking all step necessary to resume operations.  
  • New York Public Service Commission (PSC) recently issued a notice requesting public comments on three topics: utility ownership of generation, statewide renewable solicitations, and options to manage risk in offshore wind development.  The notice follows a May 2025 PSC Order that directed Department of Public Service (DPS) Staff to solicit comments as part of its comprehensive review of renewable procurement mechanisms and alternative options, which is scheduled for completion within the next year.  This review will consider the New York Power Authority’s (NYPA) expanded capacity to develop new renewables and utility ownership.  Additionally, the Notice references the July 2025 PSC Order that withdrew the Public Policy Transmission Need (PPTN) finding adopted in June 2023.  The PPTN had previously directed NYISO to hold a solicitation for transmission solutions to connect at least 4,770 MW of offshore wind capacity into New York City.  The withdrawal was due to recent federal actions that have decreased the prospects for offshore wind resource development and construction. The PSC is requesting input on various regulatory and operational questions related to these subjects to inform its consideration and implementation of renewable energy initiatives.  The PSC is also evaluating the New York State Energy and Research Development Authority’s current solicitation process to meet the State’s energy objectives and is seeking feedback on proposed evaluation issues.  The PSC is also seeking stakeholder comments regarding approaches for planning offshore wind infrastructure, managing project development risks, and supporting cost-effective transmission solutions.

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • The heat that has been present since late last week will continue to be a part of the conversation across the West, but will have the volume turned down as the daytime highs fall out of triple digits in the Pacific Northwest. California is going to be oscillating all week with highs in the low/mid-90's in Sacramento while the LA Basin is roughly five degrees cooler. The Desert Southwest cities like Phoenix and Las Vegas are registering in the below-normal category today and tomorrow as the daytime highs struggle to reach the century mark leading into the end of the core summer months. The warmest days of the summer brought named fires in Central Oregon and SoCal over the past week with the most active blazes on the West slope of the Southern Sierra Mountains (Garnet Fire). Numerous other new fire ignitions were reported, primarily in hilly and mountainous areas of the southern parts of the state. As of yesterday evening, none were identified as posing an immediate risk to electricity infrastructure though this is a constantly developing story that needs monitoring for at least the next 60 days.
  • As the heat peaked at the end of last week and the CAISO registered what could be the highest loads of the year in the 42 – 43 GWs range, daily natural gas displayed something not often seen as the desert hub outran SoCal Border prices. Given the extreme heat in the deserts, trading hubs escalated where SoCal Border – Ehrenberg jumped up $0.73 a dec to a settle price of $3.87 while SoCal Citygate increased by $0.16 and notched $3.78. The notion of a point upstream of SoCal city gate trading above the city gate price is impressive and rare unless demand on the grid is extreme and constraints are in play. Spot natural gas prices should not match that performance this week as the power demand dissipates into the long holiday weekend.
  • The legislature returned to work following its summer recess on August 18th and will conclude its work for the year on September 12th, leaving the governor until Oct 12th to act on any legislation sent to him by the end of the session. One of the items in front of the legislature is the question of whether to Restock the Wildfire Fund (the effort does not have a bill number yet). Governor Newsom has proposed reupping the state’s wildfire liability fund, meant to prevent utilities from going bankrupt when their equipment sparks wildfires, with a $9B extension of a surcharge on ratepayer bills (and $9B from shareholders). There’s a sense of urgency: SCE alone could drain the fund with its potential liability from the Eaton Fire in January, leaving nothing to cover any new utility-sparked wildfires that emerge during the upcoming months, typically the most dangerous of the year for fires. The proposal is a bitter political pill, however, during a year that is supposed to deliver on affordability.

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