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NOTE: We will not be sending the Energy Market Update the week of September 7 due to the holiday.

Weekly Energy Industry Summary

Commodity Fundamentals

Week of August 31, 2026

By the Numbers:
 
  • October is now the new prompt month.
  • Prompt-month natural gas settled at $2.94/MMbtu, up $.05 on Monday, August 31.
  • One week ago, prompt-month (September) natural gas settled at $2.78, on Monday, August 24.
  • Prompt-month crude oil (WTI) settled at $85.76/bbl., up $2.36 on Monday, August 31.
  • One week ago, prompt-month crude oil (WTI) settled at $81.94/bbl., on Monday, August 24.

Natural Gas Fundamentals - Neutral

  • The month of September begins with production at 111.2 Bcf per day. For the same period last year, production was 107.6 Bcf per day.
  • Elevated crude oil prices are conducive to increasing natural gas production, particularly in the Permian Basin.
  • The natural gas liquids (NGL -- Propane, Ethane, Isobutane, Normal butane) composite average is near $8 per MMbtu, a price that provides strong returns to producers and is conducive to maintaining or increasing the production of natural gas, all other things being equal.
  • On the demand side of the ledger, power generation demand, month-to-date (MTD) averaged 47.3 Bcf per day, versus 40.1 Bcf per day for the same period last year.  Residential/commercial demand, MTD, averaged 7.7 Bcf per day versus 8.6 Bcf per day for the same period last year.  LNG feedgas demand, MTD, averaged 20.1 Bcf per day versus 16.8 Bcf per day for the same period last year.
  • Exports to Mexico are up modestly, MTD, at 8 Bcf per day versus 7.5 for the same period last year.
  • 2027-31 strip prices settled (8/31) at $3.29, $3.68, $3.69, $3.69, $3.63/MMbtu respectively.
  • 2027-31 strip prices settled (8/24) at $3.30, $3.70, $3.70, $3.64, $3.60/MMbtu 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 $85.76/bbl., up $2.36.
  • Two Saudi super tankers were attacked near the Strait of Hormuz, both carrying two million barrels.  No crew members were killed, but the attacks are a major escalation.  
  • Iranian crude exports have collapsed. Reuters reports Iranian oil sales fell from 2 million barrels per day in March to an estimated 230,000 barrels per day in August.
  • Iran launched missiles at U.S. military bases in Jordan after the U.S. attacked Iranian coastal missile/drone batteries.
  • The U.S. strategic petroleum reserve (SPR) declined 3.1 million barrels over the past week to 287 million barrels, its lowest level since 1982.
  • The Trump Administration announced an arrangement involving access to a large portion of Venezuela's oil reserves and Trump said Venezuelan crude could be used to refill the U.S. SPR.

Economy - Neutral

  • Fed Chairman Warsh signaled a hawkish approach to inflation at last week's annual meeting at Jackson Hole.  Warsh said the 2% inflation target is "non negotiable," and said the Fed's focus should be on prices.  Although summer inflation readings had come in "better than expected," Warsh said they did not show that underlying inflation trends had "meaningfully improved."  
  • Last weeks Q2 GDP downward revision to 1.5% contrasts with a stronger consumer-spending revision; second quarter personal consumption growth was revised upward to 3.4% signaling household demand is reasonably healthy.
  • The June 2026 non-residential construction annual rate remains strong at $173 billion, about two times the rate of the early 2020s.  
  • Data centers and AI infrastructure demand remains robust sustaining demand for specialized facilities, electrical equipment, chips, and computing hardware.
  • Consumer confidence fell from 90.2 to 89.4 in August, a seven-month low.

Weather - Neutral

  • Near-term heat will extend from the plains into the Mid-Atlantic.  Conditions on the East Coast will be more variable with the I-95 corridor north of the Mason-Dixon line averaging in the low 80s over the next ten days.
  • Tropical storm Edouard makes landfall on the upper-Texas coast today brining rain to the Houston metro area and keeping a lid on temperatures in the low 90s (still very hot and very humid).

 

 

Weekly Natural Gas Report

  • Inventories of natural gas in underground storage for the week ending August 21 are 3,184 Bcf; an injection of 15 Bcf was reported for the week ending August 21. Stocks were 30 Bcf lower than this time last year and 167 Bcf above the five-year-average.
Values reflect week ending Aug. 28, 2026
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Prices reflect week ending Aug. 28, 2026

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices remained unchanged over the week with little movement in price throughout. The NYMEX natural gas contract found some support from the increased cooling demand expected this week, but it is still trying to balance the increased demand factors with the general over-supply of natural gas in the market.  The roaming summer ridge will settle over the eastern United States this week, supporting a broad area of much-above-normal temperatures. Thunderstorms will track along the northern edge of the heat ridge from the Great Lakes into the Northeast, tempering the heat in some locations. The ridge will shift back toward the Mid-Continent this weekend into early next week, allowing a cold front to move through the East and bring an end to the heat. The forward electricity prices for the 2027-2031 calendar strips were unchanged over the past week, across the board for all terms. The month-to-date, day-ahead settlement price for August in West Hub is $52.31/MWh which is -41% lower than July’s final settlement price average of $89.78/MWh.
  • New Jersey Governor Sherrill Signs Bills Impacting Data Centers - On 8/27, Governor Mikie Sherrill signed two pieces of data center legislation passed by the legislature earlier this year.  The first bill, A5156, effectively eliminates tax credits available to data centers. The "New Jersey Economic Recovery Act of 2020" authorized the award of tax credits up to $500 million for certain projects related to the development of artificial intelligence or data centers in New Jersey.  As of May 2026, the New Jersey Economic Development Authority has awarded $250 million in tax credits to one project.  The bill reduces the total amount of tax credits available by the uncommitted amount of $250 million, effectively leaving in place the tax credits already awarded and eliminating future projects from eligibility. Under the second bill, S3379, data centers will be required to submit reports to the Board of Public Utilities that include “basic information” on the amount of energy and water they use, as well as anything else the board “deemed necessary.” The legislation also tasks the State's Board of Public Utilities with publishing “certain information” about data center energy and water usage, information on performance and sustainability that the data centers submit will not be published for data centers individually and is exempt from disclosure under the Open Public Records Act.  Each data center will be required to submit the reports twice a year once it’s been in operation for a year and is required to submit the reports for three years. Both bills take effect immediately.

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were slightly lower over the week continuing the downward trend of late. The NYMEX natural gas contract found some support from the increased cooling demand expected this week, but it is still trying to balance the increased demand factors with the general over-supply of natural gas in the market.  The roaming summer ridge will settle over the eastern United States this week, supporting a broad area of much-above-normal temperatures. Thunderstorms will track along the northern edge of the heat ridge from the Great Lakes into the Northeast, tempering the heat in some locations.  The ridge will shift back toward the Mid-Continent this weekend into early next week, allowing a cold front to move through the East and bring an end to the heat.  The forward electricity prices for the 2027-2031 calendar strips were -2% lower for 2027 and -1% lower, for all other terms.  The current, month-to-date day-ahead settlement price average for August in COMED is $39.45/MWh or is -41% lower than July’s final price of $67.08/MWh, while that average price in AdHub is $46.05/MWh or is -36% lower than July’s average price of $72.31/MWh.  In Michigan the current month-to-date price average is $44.53/MWh or is -41% lower from the prior month settlement average of $75.46/MWh, while in Ameren the average price so far for the month is $41.21/MWh or is -40% lower than last month’s $68.82/MWh final settlement average price.
  • FERC Denies LOLE Calculation Error Complaints Against MISO - FERC recently issued an order denying separate complaints filed challenging MISO’s settlement adjustments made in response to a software error that affected Loss of Load Expectation (LOLE) calculations in the 2025/2026 Planning Resource Auction.  FERC found that the software error qualified as a “Continuing Error” under the Tariff, that the resulting financial impact of approximately $280 million far exceeded the applicable materiality threshold, and that MISO’s settlement adjustments were reasonable, narrowly tailored, and consistent with the Tariff.  FERC also rejected arguments that the adjustments were barred by Mobile-Sierra, finding that auction results do not constitute contract rates and that no extraordinary circumstances justified extending Mobile-Sierra protections to the auction outcomes.  Finally, FERC concluded that the adjustments did not result in undue discrimination or an impermissible rerun of the auction, holding that MISO’s settlement-based remedy was expressly authorized by the Tariff.

Northeast Energy Summary

  • Massachusetts Governor Maura Healey announced that the state will host a New England Governors Nuclear Energy Summit on September 30 to explore how advanced nuclear and fusion technologies can help meet rising electricity demand, improve grid reliability, lower costs, and support economic growth across the region. The event will bring together policymakers, industry leaders, researchers, and other stakeholders to discuss opportunities as well as challenges related to safety, regulation, permitting, and public acceptance.
  • The summit reflects growing regional support for an "all-of-the-above" energy strategy, including the evaluation of advanced nuclear and fusion technologies while maintaining existing nuclear generation. Massachusetts is positioning itself as a leader in this space through partnerships with organizations such as MIT, UMass Lowell, and Commonwealth Fusion Systems. The announcement highlights increasing interest in nuclear and fusion as potential long-term solutions to address New England's reliability, affordability, and growing electricity demand challenges
  • A ridge over the eastern US will bring above-normal temps to much of New York this week, supporting highs in the mid to high 80s, with lower 90s possible in some areas, although thunderstorms tracking along the northern edge/Northeast of the heat ridge could tempering the heat in some locations. The ridge will shift back toward the midcontinent this weekend into early next week, allowing a cold front to move through the East and bring an end to the heat. Statewide electricity prices moved lower in August for all zones, with Zone J prices averaging ~$55/MWh this month versus ~$78/MWh in July. Forward curves show the’26-27 winter strip just under ~$140/MWh for New York City (Zone J) and ~$111/MWh in Western New York (Zone A). While prices are about ~5% lower month-over-month, they remain supported year-over-year, with the prompt winter strip up roughly ~45% depending on zone.

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • California closed out meteorological summer yesterday with its most meaningful heat event of the season in the days leading up to it. Led by an especially notable stretch in the LA Basin, Burbank’s daily high averaged 99.6o over the seven days ending August 28, with four days exceeding 100o, the warmest rolling seven-day window of the summer and a full seven degrees above the prior summer’s high-water mark of 92.6o. Looking forward, the month of September appears less dramatic as a cooling trough is expected to bring milder conditions from the Central Valley into the Pacific Northwest, while the Rockies remain the warmer part of the broader West with above-normal temperatures in the mid-to-upper 80s. Late-season heat does not appear to be in the cards so cooling demand declines will materially reduce heat rates and natural gas demand.
  • The natural gas market response to the high temps of the past week was stark as the heat landed on the part of the CAISO where gas-fired generation matters most. SoCalGas power burns rose 65% week over week to 1.35 Bcf/d. Spot prices reflected the localized stress as SoCal’s gate to the city hit $4.77/MMBtu when peak heat hit Thursday but has now settled all the way back down to $3.43 for flow today. PG&E’s gate settled as high as $3.77 on Wednesday but has less of a gap to close as it is now down to $3.37. The pullback confirms that weather demand has loosened, but it does not remove the underlying storage bid. Gas demand over the latter half of Aug has finally created space in the gas caverns, PG&E has roughly 21 Bcf of room and SoCal about 13 Bcf, and 64 days till the end of the injection season on November 1. Those gaps should keep both delivery points supported through Sept even as near-term power burns fade. The wild card in the equation is Costa Azul, the LNG terminal on Mexico’s west coast. As the facility ramps it could add roughly 0.3 – 0.5 Bcf/d of gas demand to the Desert Southwest as it will source its feedgas from States.
  • California’s electricity markets showed both the strength and the limits of demand as a balancing resource. The CAISO day-ahead peak load capped out for the summer last Wednesday at roughly 46,000 MW, or about five and half Diablo Canyons worth of difference from today’s expected peak at a little over 33,000 MW. As temperatures eased, however, day ahead index settles have come down on the CAISO’s scorecard, but in a less dramatic way than that load difference represented in multiples of DC would imply – day ahead prices peaked last Thursday at $69.70/MWh and $92.80 at NP15 and SP15 respectively; they’re down to $36.20 and $32.54 for flow today. The same pattern was visible in heat rates, with SP15 against SoCal Citygate falling from 19.5 MMBtu/MWh at its peak last week down to about 9.5 now. One benefit to the heat and gas demand over the last couple of weeks has been reduced curtailments as the added cooling demand absorbed solar production that otherwise might have been curtailed. That said, CAISO solar-plus-wind curtailment averaged 5,735 MWh per day in August, up ~37% from August 2025.

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