Natural gas market volatility tapered off a bit in May compared to the heightened price swings we observed in April. However, this didn’t translate to price stagnation. The June 2025 NYMEX contract experienced a mid-month high of $3.84 and a low of $3.10, ultimately settling at $3.20, just $3.4 cents above the May 2025 contract settlement. Meanwhile, next-day cash prices at the Henry Hub averaged $3.12 during the month.

Analysts are anticipating continued softness in Henry Hub cash prices into June until the onset of sustained summer heat, when natural gas-fired power plants will begin to play a significant role on the demand side of the equation.

Liquefied natural gas (LNG) infrastructure expansion remains a key driver of market dynamics. The Plaquemines LNG facility, which began receiving natural gas in late December 2024, is now processing approximately 2.5 Bcf per day (Bcf/d). The Corpus Christi Stage 3 project is on track to begin operations later this summer and is expected to add roughly 0.75 Bcf/d of new demand by the end of the year. Lastly, while the Golden Pass LNG project has experienced delays, it’s projected to begin commissioning activities by late 2025.

Market fundamentals continue to support a bullish outlook for winter 2025 and into 2026, driven by anticipated growth in LNG export capacity. This price strength has also extended to longer-dated contracts, with calendar year 2028 pricing rising approximately $0.30 over the past two months from around $3.50 to $3.80.

As we approach the peak of summer, forward power prices have shown a surprising trend: a steady decline. Over the past month, summer futures have dropped by approximately 14% from their May peak, reflecting a market shift that contrasts sharply with recent reliability warnings from PJM and the U.S. Department of Energy (DOE).

This phenomenon was also seen in the spot market through May, as spot prices experienced temporary spikes due to planned generator outages for seasonal maintenance. However, prices quickly reversed course, even during some of the early warm days of the season. This decline suggests that market participants are pricing in adequate near-term supply or lower-than-expected weather-driven demand. This stance may underestimate the potential risk of grid stress that both PJM and DOE have recently highlighted.

• Higher load forecasts: PJM anticipates elevated peak demand this summer, exceeding previous years — a trend driven by rising electrification and warmer weather patterns.
• Lower available supply: Total generation capacity is expected to be lower than in recent summers, intensifying the need for all resources, especially IBRs, to be grid-ready and fully operational.