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Weekly Energy Industry Summary

Commodity Fundamentals

Week of January 26, 2026

By The Numbers:

  • Prompt month (Feb 2026) natural gas settled at $6.80/MMbtu, up $1.53 on Monday, January 26.
  • Prompt month crude oil settled at $60.64/bbl, up $.01 on Monday, January 26.

Natural Gas Fundamentals - Bullish

  • February Nymex futures settled at $6.80/MMBtu, up $1.525 on Monday, January 26.
  • All eyes on Winter Storm Fern as natural gas production is reduced by freeze-offs and large storage withdrawals expected.
  • Storage withdrawals for the coming week are estimated at 250 Bcf and the following week at least 350 Bcf.
  • Storage inventories move from bearish to bullish for the remainder of winter pursuant to Winter Storm Fern.
  • Near-term freeze-offs will peak today 1/27 at between 15 and 16 Bcf and will move down decisively to near-normal levels in the ten day period. 
  • Henry Hub NYMEX Cal 27-31 strips closed at 3.81 (+0.02), 3.61 (-0.03), 3.60 (-0.01), 3.64 (+0.00), 3.62 (0.00), respectively.

Crude Oil - Neutral

  • Oil prices settled slightly lower on Monday after climbing more than 2% in the previous session as investors assessed the impact on output in U.S. crude-producing regions from winter storms and the impact of any tensions between the U.S. and Iran. WTI Mar ’26 closed at $60.59/Bbl (-0.44), while Brent Mar ’26 settled at $65.59/Bbl (-0.29), from prior day close.
  • The situation in Iran continues to be decisively, potentially affecting crude production giving some near term support to prices. 
  • The EIA's most current forecast for 2026 crude oil remains bearish at $52/bbl.
  • A consensus view of seven investment banks forecast 2026 crude oil at $25.50/bbl. 
  • The Federal Reserve Bank of Dallas consensus crude oil forecast for 2026 $62/bbl.
  • The general outlook is more bearish than bullish for crude oil relative to the current pricing action for 2026.

Economy - Neutral

  • The Personal Consumption Expenditures Price Index, a measure the Fed, uses as its main forecasting tool, showed inflation at 2.8% for the month both for headline and core in November.
  • The readings were inline with market expectations. But, showed inflation still above the central banks' 2% target
  • Personal income grows 0.1% in October and 0.3% in November. 
  • The Fed is set to pause rate cuts with no clear path to resuming, the Wall Street Journal reports.
  • The U.S. economy may be experiencing step-up in potential growth the World Bank says.

Weather - Bullish

  • The overnight models had a slight decrease in heating demand, although overall demand remains strong. While the eastern United States is experiencing a predominantly cold weather pattern, some variability is present, with a brief reduction in intensity expected the South midweek before the next storm system and Arctic cold front arrive. This storm is forecasted to move north just off the East Coast this weekend, and its track will be monitored for the potential development of a snowstorm along the I-95 corridor. Another surge of very cold air is expected to follow. The pattern is expected to moderate next week as the cold air begins to ease; however, there are concerns that cold air could remain nearby and return on short notice
  • 16-30 Day Outlooks: The European Weeklies support our forecast ideas for February with a reload of the cold East pattern. The American has a stronger break to milder in early February before cold returns, but is not as robust as it once was.

Weekly Natural Gas Report:

 
  • Inventories of natural gas in underground storage for the week ending January 16 are 3,065 Bcf; a withdrawal of 120 Bcf was reported for the week ending January 16.
  • Gas inventories are 177 Bcf above the five-year average and 141 Bcf more than the same time last year. 
Values reflect week ending Jan. 23, 2026
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Prices reflect week ending Jan. 23, 2026

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices were higher on the week, particularly in the near terms, as the January cold started to provide significant uplift to those terms.  NYMEX futures surged over 90% since last week, due to the Arctic blast that the eastern 2/3 of the country is experiencing and the resulting decline in natural gas production associated with the gas well freeze-offs.  The weekend storm has moved off the East Coast, followed by a fresh surge of Arctic air from Canada. This will result in a very cold week across the eastern half of the nation. There will be a brief easing in the severity of the cold in the middle of the week before another cold front and Arctic high usher in a new wave of frigid air later this week and into the weekend.  Forward power prices for the 2026-2030 terms were 5% higher last week, with a 15% increase for the balance of 2026 term and only a 2% increase on the back end of the price curve for 2027-2030 terms.  Expect prices for those terms to be higher over the next week.  The month-to-date, day-ahead settlement price average in West Hub for January is currently averaging $118.23/MWh, which is 72% higher than December’s final settlement price and 77% higher than January 2025.
  • FERC Accepts PJM’s Updated Capacity Market Parameters – On 1/21, FERC approved PJM’s Periodic Review (referred to as the Quadrennial Review in PJM’s Tariff and required at least every four years) that updates key auction design parameters affecting capacity market clearing prices as well as the amount of capacity procured.  These updates include changes to the shape of the Variable Resource Requirement Curve (VRR Curve or capacity demand curve), the estimated Cost of New Entry (CONE), and the method for determining the energy and ancillary services revenue offset.  FERC’s order also approved PJM’s proposal to retain a combustion turbine as the Reference Resource.  The changes will be reflected starting with the 2028/2029 Base Residual Auction (BRA), which is scheduled to commence on June 30, 2026, and continue through the 2031/32 BRA. 

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were higher on the week, particularly in the near terms, as the January cold started to provide significant price uplift.  NYMEX futures surged over 90% since last week, due to the Arctic blast that the eastern 2/3 of the country is experiencing and the resulting decline in natural gas production associated with the gas well freeze-offs.  The weekend storm has moved off the East Coast, followed by a fresh surge of Arctic air from Canada. This will result in a very cold week across the eastern half of the nation. There will be a brief easing in the severity of the cold in the middle of the week before another cold front and Arctic high usher in a new wave of frigid air later this week and into the weekend.  Forward power prices for the 2026-2030 terms, last week, were 4% higher with a 14% increase for the balance of 2026 and only a 1% increase on the back end of the price curve for 2027-2030.  Expect prices for those terms to be higher over the next week.  The month-to-date, day-ahead settlement price average in COMED for January is currently $72.83/MWh, which is 80% higher than the prior month of December’s final settlement price, while that current average for AdHub is $85.04/MWh, which is 72% higher than last month.  In Michigan the current price average for January is $78.85/MWh which is 60% higher than last month, while in Ameren the average index price is $79.47/MWh, or 82% higher than last month's settle.
  • FERC Accepts PJM’s Updated Capacity Market Parameters – On 1/21, FERC approved PJM’s Periodic Review (referred to as the Quadrennial Review in PJM’s Tariff and required at least every four years) that updates key auction design parameters affecting capacity market clearing prices as well as the amount of capacity procured.  These updates include changes to the shape of the Variable Resource Requirement Curve (VRR Curve or capacity demand curve), the estimated Cost of New Entry (CONE), and the method for determining the energy and ancillary services revenue offset.  FERC’s order also approved PJM’s proposal to retain a combustion turbine as the Reference Resource.  The changes will be reflected starting with the 2028/2029 Base Residual Auction (BRA), which is scheduled to commence on June 30, 2026, and continue through the 2031/32 BRA. 

Northeast Energy Summary

  • The New England Clean Energy Connect transmission line began importing approximately 1.1 GW around the clock on January 16. The project has resulted in additional congestion across the ME/NH interface (average ~$2-3/MWh, up to ~$40/MWh in a few hours since entering service) despite that interface limit being increased to approximately 2,100MW with the interconnection work done for the project. Some network/system protection work related to the project remains outstanding and until that work is completed, the project’s commercial operating date is “provisional” and the project is subject to interim ISO operating procedures, which under certain, highly unlikely, system condition scenarios would proactively interrupt power from NECEC to protect generators in New England.
  • On January 20, Republicans in the Massachusetts Senate and House filed their own omnibus energy affordability bill, HD.5554. The bill highlights Republican priorities for reducing energy costs in the state, including creating special commissions to examine and reduce costs associated with utility delivery fee structures, the MassSaves energy efficiency program, and natural gas. The bill also includes refunding at least 50% of alternative compliance payments (ACPs) collected from the state’s Renewable Portfolio Standards program to ratepayers. Further, the bill allows for customers to utilize “portable solar generation devices” to help reduce their electricity usage. Additionally, similar to the House affordability bill from last year, this bill contains the industry-supported consumer protections for the residential retail electricity market. The bill also adds the ability for an affiliate of the electric distribution company to compete in auctions to serve default service supply. The bill would also require the Office of Energy and Environmental Affairs (EEA) to consult with the Massachusetts Clean Energy Center (MassCEC) to develop and implement the framework of a multi-state compact with New Hampshire, Maine, Vermont, and Connecticut to research and development of energy produced by nuclear fusion. The compact will include a comprehensive plan to obtain regulatory approvals, finance, and operate one or more nuclear fusion reactors for research and spread the costs across the states.
  • Earlier this month, New York's Empire Wind 1 offshore wind project received a major boost after U.S. District Court Judge Carl Nichols issued a preliminary injunction allowing construction to resume, reversing a stop-work order from the Trump Administration.  The judge found that the developers - led by Equinor - showed both potential irreparable harm from continued delays and a strong likelihood of success in challenging the federal order.  Equinor, which has already invested over $4 billion and completed 60% of the project, warned that the suspension threatened the wind farm’s viability.  The decision was welcomed by New York officials, including Governor Hochul and Attorney General Letitia James, who view the project as central to the state’s clean energy goals and workforce.  Empire Wind, a 54-turbine facility off Long Island, is expected to power more than half a million homes by next year.  The case will move forward on an expedited schedule as similar legal challenges proceed for other offshore wind projects along the Atlantic Coast. 
  • New York governor Kathy Hochul’s 2026 State of the State Address places energy affordability and reliability at the center of New York’s policy agenda heading into an election year, with a series of proposals that signal a notable shift toward advanced nuclear development, refined renewable deployment, and heightened scrutiny of utilities and large energy users.  Against the backdrop of rising household energy expenses,  the Governor framed her priorities around reducing the financial burden on ratepayers while modernizing the state’s energy infrastructure.  One highlight of the speech is the ambitious expansion of New York’s nuclear power goals: raising the target for new nuclear generation from 1 GW to 5 GW, complemented by a workforce development initiative aimed at ensuring that the jobs, training, and long-term economic benefits of advanced nuclear technologies remain within New York.  These proposals are further detailed in the Governor’s Policy Briefing Book. In addition to nuclear investment, Hochul highlighted opportunities to integrate renewable energy into schools and agricultural operations through expanded State Building Aid flexibility and a new Sun and Soil Program supporting agrivoltaics.  Recognizing the need to accelerate key infrastructure and clean energy projects, the administration proposes a new permitting acceleration program for projects of statewide significance, including advanced nuclear projects, along with DEC-led development of Generic Environmental Impact Statements to reduce review timelines for smaller renewable and housing projects.  Collectively, these reforms aim to streamline development while maintaining environmental rigor, improving interagency coordination, and addressing long-standing permitting bottlenecks. Ratepayer fairness and affordability also feature prominently in the Governor’s policy agenda.  The Briefing Book outlines legislative changes requiring utilities to disclose executive compensation metrics, cap operating and capital spending growth below inflation when seeking rate increases and eliminating non-energy charges from customer bills.  A new affordability index, paired with annual DPS reporting and potential deployment of an independent Affordability Monitor for utilities found to be underperforming, would provide regulators with expanded oversight tools to protect consumers in an era of rising energy demand and infrastructure costs. A major new initiative targets data centers, which the Governor characterized as both critical to innovation and energy intensive.  Under the proposal, data centers would either pay higher charges that reflect their grid impacts or be required to supply their own energy.  The Energize NY Development program, to be led by DPS, would modernize interconnection processes for large energy users, improve transparency around grid upgrades, and ensure projects with high demand but limited economic benefits bear the costs they impose.

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • The weekend storm that captivated the nation and drove grocery store sales to record highs has moved off the East Coast and was followed by a surge of Arctic air pouring down from the pole through Canada. The result is a very cold week across the eastern half of the nation with forecasts indicating the bitter cold will ease briefly before ramping back into the severe category with a new wave of frigid air late this week and into the weekend. Meanwhile out West, the forecasts are trending in the warmer direction to wrap up January and last through the first 10 days of February. By the end of the week, widespread above- to much-above normals will be seen across the forecast maps for the Western half of the nation. This warmer than normal pattern is shown to last into the second week of February as the colder air remains focused across the Eastern U.S. Forecasts like this reinforce that those living in California made good life choices.
  • Auction clears for both gas and power trended stronger over the last week led by outsized settlements for SoCal prices despite recent temps in the LA Basin that started with sixes and sevens during the middays. Notably, SoCal Border settled $4.00 MMBtu above SoCal city gate for the weekend package as the border price is tethered to pricing strength in West Texas. With cash prices skyrocketing in Midcon and Eastern markets, molecules ceased flowing west along the pipelines and sought higher value homes. The Rockies trading hubs are connected to MidCon points and SoCal is tied to Permian Basin. Storage pulls from Aliso Canyon and reduced production due to wellhead freeze-offs also contributed to the situation. Pricing action at PG&E’s city gate largely sat this round out enabling more gas-fired generation to be produced in NorCal and shipped south along Path 15, explaining why SP15 day ahead prices have cleared over NP15 despite abundant sunshine and solar production. This has been welcome news for gas storage operators who were looking for the opportunity to pull gas out of storage in order to clear space for the upcoming refill season.
  • On Jan 15, SoCalGas filed an application to maintain or potentially increase storage capability at the Aliso Canyon field. In its application, SoCalGas requests that the California Public Utilities Commission (CPUC) review Energy Division staff's Biennial Assessment and decline to adopt the Biennial Assessment’s recommended inventory reduction of 10 Bcf, maintain at least the current maximum (68.6 Bcf) and potentially increase the maximum if needed. SoCalGas argues that Aliso Canyon continues to play a critical role in maintaining energy reliability and adopting the recommended reduction would significantly increase reliability risk. SoCalGas’s analysis indicates that increasing the maximum inventory level may be more appropriate to preserve reliability and that reducing Aliso Canyon’s inventory could increase price volatility and energy costs. SoCalGas proposes a testimony due date in Q3 2026 and a final decision in Summer 2027.
  • Over the last couple of weeks, an uncomfortable silence has settled across the West. With snowpack already below average in many watersheds due to this winter’s multitude of “warm” storm systems, the mid-point of the region’s snow-accumulation season has arrived with snow-water equivalencies (SWEs) falling farther behind normal daily. Recent dry and mild patterns have whittled down snowpack levels even further with California’s SWE dropping to 58% of the median value (81% last week) as of this morning’s report. Washington is down to 55% (64% last week), and Oregon is at 31% (37% last week). The water supply forecast for The Dalles has decreased as well over the past week to 92% of average for the April-September period (98% last week). There is little to no improvement on the horizon. For now, however, more than half of the 11-state Western region—including all of California—is free of drought. But the anomalous winter warmth and corresponding lack of snow could have serious future implications for wildfire activity and summer water supplies.
  • Good news to end the report this week, Highway 1 through Big Sur fully reopened on January 14th for the first time in three years, ending its longest sustained closure after crews cleared a troublesome slide area months ahead of schedule. The reopening of the Regent’s Slide section north of Lucia restores the iconic coastal connection between Carmel and Cambria, which had been severed by a series of massive landslides starting in 2023. While much of Highway 1 was open throughout the last three years, it was essentially split in two by Regent’s Slide, which occurred on February 9, 2024, and Paul’s Slide, which hit six miles to the south on January 14, 2023.

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