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New Section Added!: At the conclusion of each weekly publication, you’ll now find insights in collaboration with LevelTen Energy on Power Purchase Agreements (PPAs), along with notable developments in the renewable energy market. Stay current on emerging trends, transaction activity, and key news shaping the clean energy landscape.

Weekly Energy Industry Summary

Commodity Fundamentals

Week of July 28, 2025

By The Numbers:

  • NG '25 prompt-month NYMEX natural gas settled at $2.99 per MMbtu, down $.12 on Monday, July 28.
  • NG '25 prompt-month NYMEX natural gas settled at $3.33 per MMbtu, down $.24 a week ago on Monday, July 21.
  • NG '25 prompt-month NYMEX crude oil settled at $66.71 per barrel, up $1.55 on Monday July 28.

Natural Gas Fundamentals - Neutral/Bearish

  • Prompt NYMEX natural gas settled at $2.99 per MMbtu, down $.12/MMbtu on Monday, July 28.
  • Natural gas production continues to move up nearly breaching 108 Bcf this week, an all-time high.
  • Production has risen 1.3 Bcf per day this month versus last month.
  • Month-to-date production averaged 106.5 Bcf per day versus 102.4 Bcf per day for the same period last year.
  • Year-to-date, production is up 3.9 Bcf per day over the same period last year.
  • Power generation demand for July averaged 48 Bcf per day versus 49.2 Bcf per day for the same period last year.
  • Residential/commercial demand for July averaged 7.1 Bcf per day versus 7.4 Bcf per day for the same period last year.
  • Industrial demand for July averaged 21.7 Bcf per day versus 21.9 Bcf per day for the same period last year.
  • LNG exports for July averaged 15.6 Bcf per day versus 11.8 Bcf per day for the same period last year.
  • Exports to Mexico for July are 6.3 Bcf per day, flat to last year.
  • The gas market is well supplied given the rise in production, and a more than adequate forecast for storage inventory.  The support underneath pricing; robust LNG exports coupled with power-generation demand. The vast majority of the pricing action during the past month has been weighted to the near-term contracts.
  • Some near-term relief on the power-generation front is coming, but the August outlook is supportive of pricing near current levels.

Crude Oil - Neutral

  • NYMEX (WTI) prompt-month-crude settled at $66.71 per barrel, up $1.55.
  • Crude got a bump from greater clarity regarding trade pursuant to some major announcements by the Trump Administration.
  • Crude is getting some support from potential energy-related sanctions on Russia as the administration applies pressure for a peace deal between Russia and Ukraine.
  • The U.S. is threatening to sanction buyers of Russian oil, a significant change of tactics.
  • India would be most affected by such action.

Economy - Neutral

  • The Trump Administration reached a major trade deal with the EU.
  • This follows several other major deals with Japan, The Philippines, Indonesia, Vietnam, and the UK.
  • Canada, Mexico, Brazil, China and India are still involved in negotiations.
  • Consumer confidence climbed to 97.2 in July; up from 95.2 in June.
  • The IMF raised its global economic outlook as trade deals come into focus.
  • U.S. exporters of aircraft and other products will benefit from the restructured tax deduction in the recently passed Big Beautiful Bill, The Wall Street Journal reports.
  • Home prices hit a record high in June, dragging down sales.

Weather - Neutral/Bearish

  • The heat wave in the East will give way to a cold front over the weekend into next week.
  • Temperatures will move to "above normal" in the Northern Tier late next week.
  • Temperatures in the Southern Tier will be mostly "normal."
  • The West Coast will be cool.
  • The Interior West will be hot.
  • The Tropics are expected to heat up with an active hurricane season.

Weekly Natural Gas Report:

 
  • Inventories of natural gas in underground storage for the week ending July 18 are 3,075 Bcf; an injection of 23 Bcf was reported for the week ending July 18.
  • Gas inventories are 171 Bcf above the five-year average and 153 Bcf less than the same time last year. 
Values reflect week ending Jul. 25, 2025
Prices reflect week ending Jul. 25, 2025

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices were lower over the past week as U.S. natural gas futures fell the to their lowest since April 22, as weaker-than-expected summer heat and robust production kept downward pressure on prices throughout July.  Ridging over the eastern United States will bring above and much above normal temperatures through the middle of this week, accompanied by high humidity.  Later in the week, the eastern ridge will shift westward, allowing a cold front to break the heat and bring below-normal temperatures into the forecast that last through the weekend.  The pattern in the East will begin to warm again next week, but it is not expected to be as intense as the current heat wave.  Power futures were -2% lower last week for the entire 2026-2030 term.  The month-to-date, day-ahead settlement price in West Hub for July is averaging $62.05/MWh, which is 36% higher than June’s final average price and 38% higher than July’s average year-over-year.
  • PJM Base Residual Auction (BRA) for Capacity in 2026/27 Clears at the Negotiated Cap - On 7/22, PJM announced the results of the 2026/27 BRA auction.  As previously approved by FERC, PJM implemented a price cap and floor following negotiations with the Shapiro Administration in response to high prices seen in the 2025/26 auction.  The price cap was set at $329.17/MW-day, and the price floor at $177.24/MW-day.  The entire RTO cleared at the price cap and the lack of price separation by Locational Deliverability Area indicates sufficient local capacity across all areas.  However, PJM reported that it failed to meet its target reserve margin for the first time in an auction, clearing at an estimated reserve margin of 18.9% converted to Installed Capacity (ICAP) compared to the required Installed Reserve Margin of 19.1%. The results were largely driven by new supply additions lagging demand growth and announced retirements.  The total capacity PJM cleared exceeded RTO Reliability Requirement by only 139 MW Unforced Capacity (UCAP) reflecting the tightness in the PJM system. Notably, demand response participation remained flat in ICAP terms despite a generally held belief that the floor price would encourage more demand response to offer.  PJM estimated the auction clearing price would have been $388/MW-day without the cap.  After three years of declining new generation entering the auction, this auction had a positive development with an increase in new generation and uprates totaling 2.6 GW in UCAP terms.  

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were lower over the past week as U.S. natural gas futures fell the to their lowest since April 22, as weaker-than-expected summer heat and robust production kept downward pressure on prices throughout July.  Ridging over the eastern United States will bring above and much above normal temperatures through the middle of this week, accompanied by high humidity.  Later in the week, the eastern ridge will shift westward, allowing a cold front to break the heat and bring below-normal temperatures into the forecast that last through the weekend.  The pattern in the East will begin to warm again next week, but it is not expected to be as intense as the current heat wave.  Power futures were -2% lower last week for the entire 2026-2030 term.  The month-to-date, average day-ahead settlement price in COMED for July is $54.80/MWh, which is 36% higher than June’s final average price, while in AdHub that average electricity price is $54.48/MWh or 24% higher than the previous month.  In Michigan, the average month-to-date electricity price currently is $60.73/MWh or is 31% higher than last month, while Ameren is averaging $56.99/MWh and is 32% higher than the previous month of June.
  • PJM Base Residual Auction (BRA) for Capacity in 2026/27 Clears at the Negotiated Cap - On 7/22, PJM announced the results of the 2026/27 BRA auction.  As previously approved by FERC, PJM implemented a price cap and floor following negotiations with the Shapiro Administration in response to high prices seen in the 2025/26 auction.  The price cap was set at $329.17/MW-day, and the price floor at $177.24/MW-day.  The entire RTO cleared at the price cap and the lack of price separation by Locational Deliverability Area indicates sufficient local capacity across all areas.  However, PJM reported that it failed to meet its target reserve margin for the first time in an auction, clearing at an estimated reserve margin of 18.9% converted to Installed Capacity (ICAP) compared to the required Installed Reserve Margin of 19.1%. The results were largely driven by new supply additions lagging demand growth and announced retirements.  The total capacity PJM cleared exceeded RTO Reliability Requirement by only 139 MW Unforced Capacity (UCAP) reflecting the tightness in the PJM system. Notably, demand response participation remained flat in ICAP terms despite a generally held belief that the floor price would encourage more demand response to offer.  PJM estimated the auction clearing price would have been $388/MW-day without the cap.  After three years of declining new generation entering the auction, this auction had a positive development with an increase in new generation and uprates totaling 2.6 GW in UCAP terms.

Northeast Energy Summary

  • On July 16, the Massachusetts Department of Public Utilities (DPU) released a Hearing Officer Memorandum summarizing the last 19-07 working group meeting on July 1 and providing its latest proposal for a “market reset.”  The 19-07 docket focuses on adding consumer protections into the competitive supply market to help combat perceived issues.  In the new proposal, DPU staff would still require all initial enrollments to go through the state-owned energy shopping website, Energy Switch, and require suppliers to list every available product on the website.  However, the new proposal would allow suppliers to enroll a customer on their behalf so long as the supplier enrolls the customer through Energy Switch and the customer has confirmed the enrollment through a verification before the enrollment has occurred. For automatic renewals, customers would have to first agree during enrollment that they want to be automatically renewed at the end of their contract term.  Fixed-price contracts could only renew to fixed-price contracts and the price can be no more than the price of the product listed on Energy Switch.  Further, the price of the product cannot increase more than the price the customer is currently paying without consent.  The proposal also includes a ban on charging early termination fees for products that are automatically renewed. For voluntary renewable products, DPU staff would establish a 4-tiered system that requires Green-e certification.  The tiers are: 1) Good: the voluntary component is composed entirely of Green-e certified products affiliated with projects in New England; 2) Better: the voluntary component is composed entirely of Green-e certified products affiliated with projects located in Massachusetts: 3) Best: the voluntary component is composed entirely of Massachusetts RPS Class I certificates; and 4) Prime: the voluntary component supports new resources. 
  • On July 23, the Energy Planning Board approved a Draft Energy Plan acknowledging significant challenges in meeting New York state’s climate targets within the intended timelines, attributing the difficulty to the growing demand for electricity and a continued dependence on fossil fuels.  The draft plan outlines an “additional action” pathway, targeting a 40% reduction in greenhouse gas emissions from 1990 levels by 2036 - six years beyond the statutory requirement.  Earlier achievement of this target is considered financially prohibitive, with more aggressive policies estimated to increase total economic costs by 35% by 2040.  Despite sustained policy efforts extending over two decades, much of New York’s energy continues to be sourced from fossil fuels.  The draft plan emphasizes the current necessity of combustion-based power plants to maintain grid reliability and affordability until such time as alternative energy resources become broadly available.  The draft plan also recommends continuing efforts to evaluate extension of the Zero Emission Credit (ZEC) program to conclude and coincide with federal relicensing application deadlines, to ensure the continued operation of the existing nuclear fleet to contribute to climate goals, grid reliability and fuel diversity.  The plan advocates for ongoing investment in renewable energy technologies, electric vehicles, and heat pumps, as well as further exploration of emerging solutions including advanced nuclear, hydrogen fuel, and carbon capture systems.  Nevertheless, anticipated changes in federal energy policy are expected to increase the cost of renewable energy investments and may result in delays to project implementation.  The draft energy plan calls for further long-term planning for advanced nuclear in New York, aligning with New York State Energy Research and Development Authority’s advanced nuclear blueprint and the state’s leadership in the NASEO First Movers Initiative.  These efforts aim to foster multi-state collaboration and support economies of scale to reduce risks in new nuclear development.  The draft plan recommends NYPA continue work toward developing at least 1 GW of nuclear power, seeking early deployment opportunities - these actions must align with the Master Plan and involve collaboration with other states to maximize shared benefits.  Affordability emerges as a central concern; a finalized version of the plan is expected before the end of the year following a series of public hearings to be held throughout the year.

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • Weather models are suggesting cooler trends across much of the Western U.S., mostly later this week and into next week. Parts of the interior West see mild heat during the mid-week period, before it all collapses to a sea of just average temperatures by the weekend. Costal population centers along California will likely continue to struggle to see any meaningful warmth thanks to cooler coastal sea surface temperatures (SSTs). Bottom line, for the part of the summer that falls smack in the middle of what is thought of as the dog days of summer, the start of August does not look hot at all across the West and the weather predictors indicate conditions do not start to look favorable for hotter than normal temperatures until we head into the second week of the month.
  • There is maintenance in play on Gas Transmission Northwest (GTN), a main pathway for gas from Canada to flow south eventually making its way into PG&E territory. There are a series of restrictions on flow volumes over the next week, but the ones scheduled for August 1 – 3 appear to be the most restrictive. Given the absence of heat in the forecast, this roadblock has not caused a corresponding price increase in PG&E basis due to lack of demand across the West. Another happy gas story is developing in SoCalGas territory as the local distribution company (LDC) had been under pressure since April as it stared down long-term capacity cuts in their Northern Zone, starting July 1st and lasting until November 2026. These cuts promised to restrict imports and elevate the value of stored molecules, while opening customers in this service territory to upside-price surprises if heat were to arrive. This put storage operators in SoCal into a race to refill storage before the pinch on pipeline flows and summer heat zapped their ability to stockpile molecules for the winter. This race is nearing the finish line as the needle on the tank is showing ~104 Bcf or roughly 4.9 Bcf below the healthy level we ended the injection season at last year, thanks to long stretches of mild weather. While things appear optimistic, the story may be far from over as who knows what late summer and the upcoming winter could deliver.
  • Negative prices returned to the SP15 day ahead index over the weekend – yes, springtime settlements at the height of summer. While CAISO’s day-ahead auction clears topped that of last week with NP15's peak hours clearing $37.92 while SP15 only managed $32.86, there were several hours of negative prices midday on Saturday and a couple on Sunday. The off-peak period is off a couple of dollars given the overnight low temperatures are a bit cooler.
  • Reuters broke an interesting story last week that California politicos are racing to find a buyer for Valero Energy's Benicia refinery in a highly unusual move. As we reported previously, Valero announced in April its intent to close this refinery near San Francisco in April 2026. The Governor’s Administration via the California Energy Commission is trying to preserve California’s gasoline supply which would appear to be an open conflict with its green policies supporting EVs and layering the regulations on oil companies. Clearly the sound of the ticking clock is getting louder as the 145,000-barrel-per-day refinery moves closer to retirement. Bear in mind Valero’s announcement came after Phillips 66 said last October that it would shut its Los Angeles-area refinery due to "market dynamics" and would begin winding down operations at its 139,000-bpd site this October. California currently has 13 operational refineries; five are relatively small processing only about 4% of the crude oil in the state, the remaining eight refineries are in the major category and produce the other 96% -- Phillips 66 and Valero’s facilities account for roughly 17% of the state's gasoline supply. Studies by UC Davis and USC said, respectively, the refinery closures could push average gasoline prices in the state from their current levels of ~$4.50/gal to $6 and $8 per gallon.

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