Highlights From Our Spring 2026 Energy Market Update
Energy markets are entering a dynamic stretch as shifting fundamentals, evolving demand patterns, and extreme weather patterns continue to shape price direction.
In our latest Energy Market Update, three members of the IGS Energy Supply team shared an overview of the latest natural gas and power market developments, highlighting how certain factors may affect businesses this year.
To understand what’s driving current market conditions, read on for the key highlights from the webinar.
A forecast update from IGS Energy’s meteorologist
IGS Energy’s Brent Rice, quantitative analyst and meteorology lead, offered insights into this past winter’s weather patterns and provided an updated forecast for this summer.
This winter was marked by discrepancy: Americans in the West experienced a very warm winter (the 24th warmest nationally on record) — while the East Coast experienced extreme persistent cold (the 22nd coldest nationally on record). This sharp weather split created a push‑pull effect in the U.S. natural gas market, amplifying regional price differences while keeping national balances tighter and more volatile than average.
As we look ahead to the summer months, we expect temps to be warmer than the 30-year average in the West and Southwest, while an El Nino system is likely to result in a cooler summer on the East Coast.
Managing future volatility in the natural gas market
Paul Leanza, IGS Energy’s Director of Gas Supply, shared an update on the natural gas market. Here are the highlights:
Structural growth is reshaping the market.
- Through 2030, capital-intensive demand growth — from liquefied natural gas (LNG), U.S. demand growth in data centers, AI, and potential reshoring of industrial businesses — makes determining future demand difficult.
- Much of the new demand in the U.S. requires around-the-clock energy and can’t easily reduce usage when energy markets tighten.
- While U.S. production continues to grow, increases are uneven and increasingly sensitive to price, investor discipline, and infrastructure constraints.
Volatility is structural, not temporary.
- Energy storage hasn’t expanded fast enough to match industry growth, amplifying daily, seasonal, and weather-driven volatility.
- Coal retirements, limited new dispatchable generation, and higher exposure to global LNG markets have raised the risk of price spikes in winter.
- Low prices are increasingly self-correcting through producer curtailments, while high daily cash prices are influenced by global LNG fundamentals.
- Winter risk premium remains elevated, particularly around extreme cold and LNG-driven tail risks.
Policy changes are at play.
- Abrupt and ever-changing federal policy directions make capital-intensive investment difficult.
- Under the current administration, infrastructure companies are quickly seeking regulatory approval.
- Tariffs on energy or energy- intensive business, such as steel, may require a change in supply chain directives.
- Ongoing global tensions are adding uncertainty and increasing price volatility across energy markets.
Adapting to a changing energy landscape
Joe Haugen, IGS Energy’s Vice President of Power Supply, shared an update on the natural gas market. Here are the highlights:
Winter Storm Fern highlights the cost of reliability.
- Winter Storm Fern drove multi-day system stress, historic fuel price spikes, and $798M in out-of-market uplift costs.
- Local natural gas prices pushed power prices above $2,300/MWh, with elevated volatility persisting through the cold weather.
- Today, extreme weather translates faster and more directly into wholesale market volatility.
Increased demand illustrates structural risks.
- Data centers account for up to ~97% of peak load growth in PJM, outpacing new generation.
- Capacity auctions are clearing at record levels and still failing to meet reliability targets. A collar on capacity prices will remain in place until May 2030.
- While new policies aim to shift costs to large loads, relief is gradual and doesn’t reverse near-term price pressure.
A few key factors are influencing power prices right now.
- There’s now a strong link between electricity costs and fuel volatility — and at least 60 percent of the time, natural gas sets PJM power prices.
- There’s a risk of higher forward prices once fuel costs for data center generators become clearer and are embedded in market expectations.
Each month, our experts weigh in on market movement and what it means for near-term pricing and risk. Whether you’re focused on managing exposure or simply staying informed, our Market Commentary offers a clear view of the forces at play — and what to consider when making energy decisions for your business. You can subscribe here.