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Weekly Energy Industry Summary

Commodity Fundamentals

Week of October 26, 2026

By the Numbers:
 
  • Prompt-month (November) natural gas settled at $2.60/MMbtu, down $.04, on Monday, October 26.
  • Prompt-month (November) natural gas settled at $3.06/MMbtu, on Monday, October 19.
  • Prompt-month crude (WTI) settled at $101.76/bbl., down $1.51 on Monday, October 26.

Natural Gas Fundamentals - Bearish

  • Recovering natural gas production coupled with increasingly bearish November and December weather outlooks are forcing an early "write off" of winter.
  • Near and mid-term weather forecasts are bearish.
  • Storage inventories are forecast near 3.8 Tcf, a level considered "comfortable" to start the winter season.
  • Production, month-to-date averaged 110 Bcf per day, and is recovering from lower levels near 109 bcf per day earlier this month.  
  • Higher oil prices (approx. $88/bbl for 2027) are playing a role in drawing increased production of "associated gas" from the Permian basin as higher oil prices reduce sensitivities to lower natural gas prices in that region.
  • 2027-31 NYMEX strip prices are: $3.00, $3.63, $3.66, $3.65 and $3.61 respectively.

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 $101.76/bbl., down $1.51 on Monday, October 26.
  • Speculation of renewed U.S. military action after the midterm elections has been growing. The U.S. government is evacuating non-essential embassy personnel in the Gulf region.
  • Top officials from Saudi Arabia, Pakistan, and Turkey met with Iranian leaders in Tehran on Monday to discuss potential for de-escalating the conflict.
  • Crude oil transiting the Strait of Hormuz so far in October averaged 16.7 million barrels per day, according to analytics firm Kpler; pr- war transit levels were 19 million barrels. However, refined products, LNG and other dry bulk goods remain severely constrained.

Economy - Neutral

  • The October S&P business activity index eased to 57.6 from 58.4 in September. Above 50 indicates economic expansion. New orders remain strong, but companies reported rising selling prices and supply-chain bottlenecks.
  • Weekly initial unemployment claims fell to 194,000 near their lowest levels in decades, yet September payroll growth was only 29,000.
  • AI investment continues to be an engine of economic growth in the near and mid-term.
  • Later today, consumer confidence, durable goods sales, and new home sales data will be released.
  • The Federal Reserve bank meets tomorrow regarding interest rates.
  • On Thursday, October 29, third quarter GDP and PCE inflation figures will be released.

Weather - Neutral/Bearish

  • The Eastern 2/3 of the nation continues to bask in "perfect" fall weather -- "perfect" in that daytime highs are comfortably warm and overnight lows are "chilly" but not overly cold.  The general effect; declining power-generation loads somewhat offset by modest gains in heating demand in the Great Lakes Region and MidAtlantic.  The Novbember and December longer range forecasts are bearish of natural gas.

 

 

Weekly Natural Gas Report

  • Inventories of natural gas in underground storage for the week ending October 16 are 3,644 Bcf; an injection of 77 Bcf was reported for the week ending October 16. Stocks were 152 Bcf lower than this time last year and 35 Bcf above the five-year-average.
Values reflect week ending Oct. 23, 2026
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Prices reflect week ending Oct. 23, 2026

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices were unchanged over the past week and remain in the same holding period that they’ve been in for over a month, which is typical for this time of the season.  There hasn’t been anything significant change in the electricity markets of late to move the meter from a risk perspective.  From a fuel perspective, natural gas futures rebounded from early losses Monday after November prices hit a six-month low, but most winter contracts remained under pressure from forecasts for unusually warm weather across major U.S. heating markets.  Strong LNG feedgas demand, lower Canadian imports, and below-average storage injections helped limit losses. The most recent weather models are trending cooler, with more pronounced changes in the traditional models than in the AI models, but both maintain a warmer-than-normal pattern through the two-week forecast period.  The forward electricity prices for the 2027-2031 calendar strips were unchanged on average, with the 2027 term decreasing -2%, while the 2029-2031 terms increased by 1%.  The current month-to-date, day-ahead settlement price for October in West Hub is $70.14/MWh, which is 3% higher than September’s final settlement price average of $67.85/MWh.
  • New Jersey Holds RGGI Hearing Focused on Ratepayer Relief - Pursuant to the Global Warming Solutions Fund Act, which requires the Board of Public Utilities (BPU) and Department of Environmental Protection (DEP) to take additional action when Regional Greenhouse Gas Initiative (RGGI) auction prices exceed $7 in two consecutive auctions, BPU and DEP held a joint hearing on 10/15 where the agencies considered elevated RGGI allowance prices and options to limit ratepayer impacts.  BPU’s Ben Hertz-Shargel opened the hearing by highlighting program benefits and reaffirming the agency’s support for RGGI.  Hertz-Shargel underscored New Jersey’s commitment to ratepayer relief, pointing to the 2026–2028 RGGI Strategic Funding Plan’s focus on affordability and the use of proceeds for both direct bill assistance and investments intended to lower costs over time while DEP emphasized the program’s investments in New Jersey.  The overwhelming majority of public testimony, including comments from Assemblywoman Andrea Caste and environmental and clean-energy organizations, supported New Jersey’s continued participation in RGGI.  A smaller group of commenters raised concerns about the program’s impact on electricity prices and the potential for emissions leakage to non-RGGI states.  Alpha Generation and the New Jersey Business & Industry Association argued that high allowance prices disadvantage New Jersey generators relative to generators in neighboring non-RGGI states and shift generation and emissions outside the program.  Several commenters argued that a border adjustment could address emissions leakage without weakening or withdrawing from RGGI. 

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were slightly higher over the past week and remain in the same holding period that they’ve been in for over a month, which is typical for this time of the season.  There hasn’t been anything significant in the electricity markets of late to move the meter from a risk perspective.  From a fuel perspective, natural gas futures rebounded from early losses Monday after November prices hit a six-month low, but most winter contracts remained under pressure from forecasts for unusually warm weather across major U.S. heating markets.  Strong LNG feedgas demand, lower Canadian imports, and below-average storage injections helped limit losses. The most recent weather models are trending cooler, with more pronounced changes in the traditional models than in the AI models, but both maintain a warmer-than-normal pattern through the two-week forecast period.  The forward electricity prices for the 2027-2031 calendar strips were 1% higher, on average, with the 2027 term decreasing -1%, while the 2029-2031 terms were all 2% higher.  The current month-to-date, day-ahead settlement price for October in COMED is $54.32/MWh, which is 14% higher than September’s final settlement price average, while that price average in AdHub is $65.61/MWh or is 4% higher than last month.  In Michigan the current monthly price average is $56.99/MWh or is -0.5% lower than September’s settlement, while that price average thus far in Ameren is $51.05/MWh, which is -14% lower than last month.
  • PJM Files Ohio Integrated Large Load Study Agreement - On 8/13, PJM filed an executed Study Agreement with the Public Utilities Commission of Ohio (PUCO) that establishes an integrated study process for PJM to evaluate SoftBank’s new data center development project.  The project, known as Flagship, consists of 765-kV transmission lines to be built by AEP Ohio, roughly 10 GW in data center load and about 10.2 GW in gas-fired generation.  This was filed as part of a State Study Agreement, which is a mechanism in PJM that allows states to sponsor and pay for transmission projects that meet their public policy goals.  In this instance, the study agreement contains an expedited interconnection process allowing PJM to study the project’s generation and load on an integrated basis and identify the transmission facilities needed to reliably accommodate the whole project outside of normal interconnection queue while still adhering to NERC reliability standards.  The agreement also contains protections to ensure that PJM’s evaluation of the Ohio Federal Energy Advocate request does not adversely affect PJM’s existing planning and interconnection responsibilities or shift the costs of the requested studies to other PJM Members.  PJM argues that this integrated approach is appropriate given the interdependent nature of the generation and load included in the Flagship project and is consistent with FERC’s policy that encourages novel approaches to address the rapid growth of large loads and the interconnection of such loads as well as the associated new generation in an efficient and reliable manner. 

Northeast Energy Summary

  • On October 5, Massachusetts Governor Maura Healey issued Executive Order (EO) No. 659: Proclaiming an Energy Emergency and Providing Immediate Home Energy Assistance and Relief on Energy Bills During the Winter Months.  The Governor issued the EO to lower anticipated heating and electric bills this winter in response to significant increases in oil prices.  The EO uses alternative compliance payments from the state’s clean energy programs to augment assistance funds for the Home Energy Assistance Program and expand eligibility to middle class households.  To reduce electric bills, the EO directs $80 million in state funds to eliminate the Solar Massachusetts Renewable Target program charge on electric bills for at least three months, requires the Department of Energy Resources (DOER) to reduce ratepayer costs attributable to the Alternative Energy Portfolio Standard (APS) program by 50%, directs the Department of Public Utilities to review the statewide net-metering program to identify ways to control costs while supporting solar development, and directs the Department of Environmental Protection to review the carbon requirements for in-state power generators to give greater compliance flexibility, allowance availability, and cost-containment mechanisms to reduce program costs.  Following the EO, DOER filed the emergency regulations on 10/7 that would reduce costs of the APS by lowering the minimum APS standard beginning in 2027.  The previous standard required 6.75% of electric sales in 2027 and increased by 0.25% per year.  Now, the 2027 minimum APS standard is set at 2%, reduces to 1.5% for 2028 and 1.25% for 2029, then is set at 1% for 2030 and beyond, thereby significantly reducing the amount of attributes suppliers need to procure to maintain compliance with the program.
  • New York power markets have transitioned into the fall shoulder season, with lower loads reducing near-term energy price pressure following this summer’s bouts of heat. Attention is increasingly shifting towards winter, when cold-weather volatility, natural gas deliverability and generator availability can quickly tighten conditions, particularly in downstate New York. The winter weather outlook continues to favor relatively mild conditions overall given the strength of El Niño, but colder-tail risk remains. Constellation expects winter temperatures to be in the top 6th warmest overall. A warmer base case would limit sustained heating demand, while periods of atmospheric blocking could still produce shorter-duration cold events capable of creating sharp regional gas and power price volatility. Despite comfortable U.S. natural gas inventories (1.3% surplus to five-year average), elevated global oil prices remain relevant to New York. Oil remains an important backup fuel for many downstate dual-fuel generators when gas becomes constrained, meaning periods of extreme cold can shift the marginal generation stack toward higher-cost fuels and produce sharp, short-duration power-price events. This helps with reliability but exposes electricity prices to potentially more expensive replacement fuel (New York Harbor No. 2 Heating Oil)  – which has more than doubled in price from this same time last year.
  • Two pipeline projects could provide longer-term relief from New York's winter fuel constraints. The Northeast Supply Enhancement project (NESE), targeting late-2027 service, would add ~400,000 Dth/day into the downstate market, while the revived Constitution Pipeline could bring another ~650,000 Dth/day of Marcellus supply into New York and the broader Northeast. In the near term, however, winter gas deliverability remains an important power-market risk as both projects still face environmental and regulatory hurdles. The Champlain Hudson Power Express (CHPE) is now an established part of New York City's supply stack, but its performance this summer demonstrated that the addition of a major transmission resource does not eliminate reliability risk. The 1,250 MW project reached commercial operation in May and is expected to supply as much as 20% of New York City demand, but experienced outages during the July heat wave. With the system moving toward winter, the market will continue to focus on the interaction between CHPE availability, remaining thermal generation, gas deliverability and growing winter electricity demand.

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • Changes over the weekend came in the cooler direction for much of the Western U.S. and Western Canada. This week will remain on the milder side farther inland across the Rockies while mild 60s and 70s will also be common across California and the Southwest. Another round of storminess is then on tap for California this weekend with some of that storminess reaching parts of the interior West and Rockies later this weekend into early next week. The renewable landscape within California is such that wind output has pulled back while the sun looks like it will shine for a couple of days this week before giving way to clouds on Friday. All ensembles show a surge of moisture pushing into SoCal and the Four Corners later this weekend into early next week. Models are in relatively good agreement on 1” of rain for SoCal and portions of the Desert Southwest, but locally heavier totals will be possible, increasing flash flooding risks. In addition to the rain, temps will be slightly below normal with highs in the 60s in Burbank and Las Vegas with Phoenix in the lower 70s. The setup is not looking good for trick-or-treating on Saturday.
  • The winter outlook strongly favors wetter-than-average conditions statewide, with precipitation likely peaking in January and February. All ten major weather models align on this trend, indicating that the Bay Area and North Bay watersheds are more likely than not to experience significant rainfall. The driving El Niño event is still strengthening; it is projected to intensify for up to two more months and peak between late December and January. For energy market buyers, the primary risk lies in the form the precipitation takes as much as total volume. Torrential downpours at lower elevations will do well to offset or turn drought conditions around but do little to preserve water for energy use. The key to a beneficial water year is good volume that arrives steadily throughout the season in the frozen form such that it is preserved at higher elevations until the late spring. But what Mother Nature giveth, she may taketh as the CAISO power market is heavily reliant on solar generation, so the expected persistent precipitation pattern warrants close monitoring.
  • A long-anticipated transition is about to occur. The state’s once-through-cooled (OTC) coastal gas fleet retained as emergency backup is expected to finally see retirement at the end of 2026. The action underscores roughly 2,859 MW of strategic, dispatchable capacity—nearly all of the CDWR Electricity Supply Strategic Reliability Reserve Program portfolio—will no longer be available for the 2027 reliability season. The affected facilities are AES Alamitos Units 3–5 (1,141.2 MW), AES Huntington Beach Unit 2 (226.8 MW), and GenOn’s Ormond Beach Units 1–2 (1,491.3 MW). Their continued operation was authorized through Dec 31, 2026, under the State Water Resources Control Board’s OTC policy and supported by CDWR agreements running from Jan 1, 2024. These plants were not retained as ordinary RA generation. Rather, the CAISO, CEC, and CPUC agreed that they should remain offline except for extreme grid events, CAISO-coordinated testing, and related reliability needs—an arrangement intended to limit both OTC operations and associated emissions while preserving a last-resort reliability backstop. The retirement list therefore has practical as well as symbolic significance. The three plants account for 2,859.3 MW of CDWR’s 3,149.8 MW strategic-reserve fleet, leaving only a much smaller collection of non-OTC emergency resources after their exit. The key question now moves from whether the OTC plants will retire to what will replace their role during prolonged heat events, wildfire-related transmission disruptions, and periods when solar output declines.

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