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Weekly sustainability insights can now be found by following this link: Sustainability Corner

NOTE: We will not be sending the Energy Market Update the week of October 12 due to the federal holiday. We will return the week of October 19.

Weekly Energy Industry Summary

Commodity Fundamentals

Week of October 5, 2026

By the Numbers:
 
  • Prompt-month (November) natural gas settled at $3.04/MMbtu, up $.03, on Monday, October 5.
  • Prompt-month (October) natural gas expired at $3.00/MMbtu, on Monday, September 28.
  • Prompt-month crude oil (WTI) settled at $89.43/bbl., down $1.69, on Monday, October 5.
  • Prompt-month crude oil (WTI) settled at $92.60/bbl., on Monday, September 28.

Natural Gas Fundamentals - Neutral

  • Month-to-date, natural gas production is down 1.5 Bcf per day from September.  
  • After several months in a row of rising production, there are signs that production is flattening in the near term.
  • The weather favors neutral pricing action this week with very seasonal temperatures largely in the eastern half of the country with California being hotter-than-normal.
  • 2027-31 natural gas strip prices settled at $3.16, $3.67, $3.67, $3.65, $3.62 per MMbtu respectively.
  • The 2027 strip price has fallen 21% in the past 15 months, from $4.01 to $3.16 per MMbtu, a multi-year low.
  • Near-term, flattening production is supportive of pricing action, while low-seasonal demand keeps the upside in check.

Crude Oil - Bullish

  • Point of Clarification: The "Bullish" moniker above will remain in place until further notice as the situation in the Persian Gulf remains highly unstable.
  • Prompt-month crude (WTI) settled at $89.43/bbl., down $1.68 on October 5.
  • Reuters reports that crude oil exports from the Persian Gulf reached 81% of pre-war levels last month.  The data excludes Iranian oil exports which have dropped to zero according analytics firms such as Kpler and Vortexa.
  • Exports of crude oil, condensates, and liquefied petroleum gas (LPG), reached an average daily volume of 19.2 million barrels per day last month.  That is down from the pre-war 23.6 million barrels per day of crude and condensate output.
  • Importantly, refined fuel exports (diesel, gasoline, aviation jet, other) are only at 60% of pre-war levels, according to analytics firm Vortexa.   

Economy - Neutral

  • The U.S. added 29,000 jobs in September, versus expectations for 90,000.  The unemployment rate rose from 4.1 to 4.2% while wage growth slowed to 3% year-over-year.  July and August payrolls were revised down by a combined 60,000, Reuters reports.
  • August consumer spending increased 0.9%, and is up 3.8% on an annualized basis.  Business investment , excluding housing increased 4.6%, a number that is considered "strong." 
  •  The Federal Reserve's preferred inflation gauge, the PCE price index rose 0.3% for the month.  Consumer confidence fell sharply in September.
  • This week, the Federal Reserve will release minutes from its most recent meeting.
  • Initial unemployment claims will be released on Thursday.
  • Consumer sentiment numbers to be released on Friday.

Weather - Neutral

  • The Eastern half of the country can largely be described as "seasonal."  This week in New York City, average daytime highs in the upper 60s and low 70s will couple with nighttime lows in the mid 50s. It's much the same for Chicago. This week in Atlanta, daytime highs will average in the upper 70s with overnight lows in the lower 60s.  Dallas will see daytime highs in the lower-to-mid 80s with nighttime lows in the upper 60s. In other words, fall is mostly in the air.  The anomaly is California which is well above normal this week.

 

 

Weekly Natural Gas Report

  • Inventories of natural gas in underground storage for the week ending September 25 are 3,415 Bcf; an injection of 64 Bcf was reported for the week ending September 25. Stocks were 138 Bcf lower than this time last year and 79 Bcf above the five-year-average.
Values reflect week ending Oct. 2, 2026
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Prices reflect week ending Oct. 2, 2026

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices were unchanged over the past week as seasonal demand starts taking hold with limited heating and cooling demand in the near-term.  The market is currently digesting pipeline uncertainty and the approaching cooler weather against a still-loose fundamental backdrop, driven by adequate supply of natural gas.  After a chilly start of the week, the East will gradually warm over the next several days. Warmth is expected to peak across the Midwest this weekend before shifting into the East early next week. This pattern will keep heating demand at bay while allowing cooling demand to increase across the South. The forward electricity prices for the 2027-2031 calendar strips were unchanged over the past week, with the near terms decreasing by ~2% while the later terms saw a slight increase of ~1%. Month-over-month, the forward prices are 5% higher for the full term.  The final, day-ahead settlement price for September in West Hub was $67.85/MWh or was 30% higher than August’s final settlement price average of $52.31/MWh.
  • FERC Accepts and Suspends PJM’s RBP - On 9/29, FERC accepted PJM’s Reliability Backstop Procurement (RBP) proposal, suspended it for five months until 2/28/27, and established a paper hearing proceeding.  FERC largely accepted the core structure of the RBP as PJM proposed, including procurement of new capacity to address PJM’s shortfall; 15-year commitments for RBP resources; a pay-as-bid auction design; a $555/MW-day average price cap; mandatory RPM price-taker offers for RBP resources; resource eligibility, project readiness, and performance requirements; and no constraints on RBP resource locations.  FERC found three aspects of PJM’s proposal may be unjust and unreasonable and established a paper hearing process to resolve the three issues.  Those issues included RBP cost allocation computations (including the potential to adjust the Initial RBP Target), transmission owner exit rules (which could increase load serving entity (LSE) obligations if a transmission owner leaves PJM), and LSE collateral requirements.  FERC also indicated that it would hold the paper hearing in abeyance if PJM re-files its RBP proposal with the three issues addressed within 30 days.  Finally, FERC established a proceeding under Section 206 of the Federal Power Act and preliminarily found PJM’s existing reliability backstop mechanism to be unjust and unreasonable.  Instituting a Section 206 proceeding provides FERC with more flexibility to modify any proposal put forward by PJM under Section 205.

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were unchanged over the past week as seasonal demand starts taking hold with limited heating and cooling demand in the near term.  The market is currently digesting pipeline uncertainty and the approaching cooler weather against a still-loose fundamental backdrop, driven by adequate supply of natural gas.  After a chilly start of the week, the East will gradually warm over the next several days.  Warmth is expected to peak across the Midwest this weekend before shifting into the East early next week.  This pattern will keep heating demand at bay while allowing cooling demand to increase across the South.  The forward electricity prices for the 2027-2031 calendar strips were unchanged over the past week, with the more near terms decreasing by ~1% while the later terms saw a slight increase of ~1%.  Month-over-month, the forward prices are 6% higher for the full term.  The final, day-ahead settlement price average for September in COMED was $47.57/MWh or was 21% higher than the August settlement, while in AdHub the price settled at $63.08/MWh or was 37% higher month-over-month.  In Michigan the final monthly price average was $57.27/MWh or was 29% higher than the prior month, while in Ameren the final price was $59.08/MWh, or was 43% higher than that of August.
  • FERC Accepts and Suspends PJM’s RBP - On 9/29, FERC accepted PJM’s Reliability Backstop Procurement (RBP) proposal, suspended it for five months until 2/28/27, and established a paper hearing proceeding.  FERC largely accepted the core structure of the RBP as PJM proposed, including procurement of new capacity to address PJM’s shortfall; 15-year commitments for RBP resources; a pay-as-bid auction design; a $555/MW-day average price cap; mandatory RPM price-taker offers for RBP resources; resource eligibility, project readiness, and performance requirements; and no constraints on RBP resource locations.  FERC found three aspects of PJM’s proposal may be unjust and unreasonable and established a paper hearing process to resolve the three issues.  Those issues included RBP cost allocation computations (including the potential to adjust the Initial RBP Target), transmission owner exit rules (which could increase load serving entity (LSE) obligations if a transmission owner leaves PJM), and LSE collateral requirements.  FERC also indicated that it would hold the paper hearing in abeyance if PJM re-files its RBP proposal with the three issues addressed within 30 days.  Finally, FERC established a proceeding under Section 206 of the Federal Power Act and preliminarily found PJM’s existing reliability backstop mechanism to be unjust and unreasonable.  Instituting a Section 206 proceeding provides FERC with more flexibility to modify any proposal put forward by PJM under Section 205.

Northeast Energy Summary

  • New England energy forward prices continue their decline on the back of easing global natural gas price tightness, temperate fall temperatures, and the anticipation of a top 10 warm winter fueled by a strong/super El Nino. Calendar 2027 forward prices was off nearly 2% on the week and 7.5% lower from its 2-month high from September 14. Calendar terms further out the curve have also declined though to a much lower magnitude. Global natural gas prices, which often drive New England energy markets because of the region's reliance on winter LNG cargoes, have traded as low as $24/MMBtu over the past 2 weeks after peaking at their highest rates since late 2022 at $28/MMBtu on September 10. Crude oil deliveries have traversed the Strait of Hormuz at levels around 80% of pre-war levels though LNG cargo flows have been significantly lower (~25%) but still recovering nonetheless.  Continued improvement on supply constraints in the region would mean more bearishness in both fuel markets though any escalation in military efforts from either side (US or Iran) would create more upside risks.
  • On September 30, the National Governors Association (NGA) convened the 2026 New England Regional Nuclear Policy Summit at the University of Massachusetts Lowell.  The summit brought together state energy officials, regulators, academics, grid operators, industry representatives, and community stakeholders from across New England to discuss the role of nuclear energy in meeting the region's reliability, affordability, and decarbonization goals.  The event builds on NGA's broader national initiative to assist states in evaluating advanced nuclear technologies and regional energy strategies, with a particular focus on fostering interstate collaboration on emerging nuclear development opportunities.  Panels discussed regional planning to allow for new nuclear, utilizing community engagement to address concerns around safety and community benefits, state collaboration on shared energy goals, and a cross-section of how new nuclear technology can fit into the New England grid.  Speakers included UMass Lowell faculty, the French Embassy, state energy departments, ISO-NE, nuclear technology companies and industry representatives, and a keynote address from Commissioner David Wright from the NRC. The summit adjourned with the New England states emphasizing the importance of continued cooperation to bring new nuclear to the region.
  • On 9/9, Governor Hochul announced six statewide workforce development awards to support the state’s emerging advanced nuclear sector.  Funded through New York Power Authority’s (NYPA) $40 million nuclear workforce commitment, the grants will support hands-on training, certifications, education pathways and wraparound services through partnerships with organized labor, Rensselaer Polytechnic Institute and State University of New York institutions, with the largest award - $3.65 million - going to the Workforce Development Institute and New York State Building & Construction Trades Council.  The investment advances the NextGen Nuclear New York initiative and the Governor’s proposed 8.4 GW Nuclear Reliability Backbone, comprising 3.4 GW of existing upstate nuclear generation, and 5 GW of additional advanced nuclear capacity.  The awards demonstrate continued state momentum behind new nuclear development while building the skilled in-state workforce needed to support project delivery, grid reliability, and long-term industry growth.  Additional awards drawing on NYPA’s $40 million commitment are expected at later dates.
  • Governor Kathy Hochul recently announced creation of an Energy Infrastructure Development Plan to create a unified, data-driven, and “investable” roadmap for meeting New York’s rapidly rising electricity demand.  The effort is tasked with balancing reliability, affordability, and the state’s aggressive clean-energy goals.  The initiative will integrate existing state planning functions and modeling efforts spanning nuclear power, large- and small-scale renewables, transmission, storage and other firm and flexible resources.  The outtakes of the new planning process are expected to inform the interim State Energy Plan update due next year as well as future regulatory proceedings and project solicitations.  Separately, NYISO planning studies are expected to identify a potential generation shortfall in the next 10 years driven by load growth, the retirement and aging of fossil-fuel plants, and delays and cancellations affecting new renewable projects.

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • The first full week of Rocktober delivered a brutally intense late-season heat event across the Golden State, with record and near-record temperatures blasting heat from the LA Basin, up the Central Valley and across NorCal. The LA Basin and the Inland Empire are the epicenter of the heat, where daytime highs are expected to bake in the low-to-mid 100s for another couple days, while even the coast will experience temperatures that will have them hitting their seldom used AC units hard. Equally noteworthy are the persistently warm overnight lows, which are limiting cooling demand relief and prolonging elevated electricity loads. Beyond California, above-normals extend across much of the Interior West, with temps in the 80s common from the Great Basin through the Rockies, while the Pacific Northwest remains comparatively mild under a more temperate marine influence. Looking ahead, the western U.S. pattern is expected to remain supportive of above-normals through bal week, although the most extreme heat should gradually moderate after the midweek period. Forecasts continue to indicate the development of a cooling trough entering the West this weekend, allowing temperatures across California and the broader western region to trend closer to seasonal averages.
  • This late-season heat wave is producing one of the most significant October demand events in CAISO history as temperatures in some areas are running 15 – 20o above normal. CAISO expected a peak load of roughly 46,400 MW for Monday, October 5 and got just above 46,000 MW yesterday when all was said and done.  That is nearly 9,000 MW above the California Energy Commission’s (CEC) 1-in-2 October forecast of 37,888 MW and nearly equal to its September peak forecast of 46,844 MW. It came close to the October record of about 43,400 MW, set in 2020; before that one had to look back to October 2015 to find its next highest peak at about 42,700 MW. Exceptionally warm overnights (low 80s) adds to the strain by keeping cooling load high insuring grid dispatchers are leaning on gas-fired generators and imports. For index buyers, high loads, limited maintenance flexibility and tighter imports point to more price volatility across CAISO and western gas and power markets. The risk is greatest during the evening ramp and should ease as temperatures moderate.
  • To make sure those units were available, CAISO has a Restricted Maintenance Operations notice in effect through October 8, which postpones routine generation and transmission maintenance to keep as much capacity online as possible. Because October is normally maintenance season; the fleet is less prepared for peak conditions than it would be in summer. CAISO also moved to make Strategic Reliability Reserve resources available which implies thinking that supply resources available through the Resource Adequacy (RA) framework might not be enough. Since this a broad west-wide event, cooling demand needs of our neighbors in the Interior West may limit the surplus imports available to California during the overnights. Expect that this event will raise planning questions in the coming weeks… is the resource adequacy planning reserve margin enough for “shoulder”-month load uncertainty? is the reliability load forecast capturing the full range of near-term risk, including more of the Known Loads in the CEC's alternative scenarios? Does California follow some eastern markets down the path of a seasonal RA structure that would pair a summer requirement covering an extended summer season with a separate non-summer/winter requirement?

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