This evening's nightcap needs ice

NatGas

Trading range: $2.98 $3.14, settling at $3.03. down 3% on the day, and down 12% m/m.

We’re only $0.12 away from hitting a 52-week prompt month low.

The four-session losing streak represents the largest $ and % decline over a four-day span since spring, reflecting bearish sentiment in the market.

LNG

With the ramp-up of Plaquemines LNG and Golden Pass, exports are expected to grow further into Q4 ‘25, with new U.S. capacity set to increase by nearly 50% over the next 2 yrs.

Power

Demand surged across much of the national grid, led by strong C&I loads and ongoing expansion of data centers, notably in the Eastern U.S.

Expect further upward pressure on power prices as demand from data centers and electrification expands, combined with potential weather-driven demand spikes.

Alternative power generation (don’t call it “clean” b/c it’s not) continues to set records.

Looking Ahead

Enbridge signed a $100BB deal with Meta to power their data centers in Texas, starting as soon as 2027.  Texas, if you think prices are high now, and optionality can get tight during high demand days, hold onto your hat because it’s getting way worse.

The Drivers

The NG market remains oversupplied for the short term, primarily due to record production and weaker weather-related demand (but not today, not in my town!).

In Summation

Power prices are likely to face further upward pressure, especially in high growth areas, as DC/AI related projects pop up everywhere.

Let’s also remember that grid upgrades to handle the ever-growing demand will need to begin yesterday and will be very expensive.  Guess who will pay for those utility company grid upgrades.  If you answered, “Me”, you win…but not in the long run….

Our Nightcap Beats Their Recap